Using the Growth Accounting Equation, If the Growth Rate of Technology

question 24

Multiple Choice

Using the growth accounting equation, if the growth rate of technology is 3 percent, the growth rate of labor is 2 percent, the growth rate of capital is 1 percent, and α = 0.25, then the growth rate of output can be estimated to be:

• A) 4.25 percent.
• B) 4 percent.
• C) 6 percent.
• D) 4.75 percent.

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Definitions:

Mean Deviation

The average deviation for all scores from the mean of a distribution, calculated as the sum of the absolute value of the scores’ deviations from the mean divided by the number of scores.

Standard Deviation

Standard deviation is a measure of the dispersion or spread of a set of data points relative to its mean, indicating how spread out the data points are.

Mean

The arithmetic average of a set of numbers, calculated by adding them together and dividing by the number of values.

Highest Score

The maximum value or score observed in a set of data.