Suppose That the Share of GDP Paid to Capital Always

question 4

Multiple Choice

Suppose that the share of GDP paid to capital always equals 25 percent and the remaining 75 percent goes to labor. If, over the course of 20 years, the capital stock had been growing at 2 percent per year, the labor force had been growing at 3 percent per year, and GDP had been climbing at a 3 percent rate, then labor productivity must have been

• A) growing at 7 percent per year.
• B) growing at 0.25 percent per year.
• C) growing at 5 percent per year.
• D) falling at 5 percent per year.
• E) falling at 0.75 percent per year.

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Definitions:

Arteries

Blood vessels that carry oxygen-rich blood away from the heart to the body's tissues.

Distributing Arteries

Arteries that branch from larger arteries to distribute blood to various parts of the body.

Tunica Media

The middle layer of the wall of a blood vessel, composed primarily of smooth muscle cells and elastic fibers, which regulate vascular diameter and blood pressure.

Elastic Tissue

Connective tissue that allows tissues in the body to resume their shape after stretching or contracting.