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In Techland, from 1980 to 2010, holding technology and human capital fixed, increasing physical capital per worker from $25,000 to $100,000 would have led to a doubling of real GDP per worker, from $40,000 to $80,000. However, not only did physical capital per worker increase from $25,000 to $100,000, but technological progress shifted the productivity curve upward so that real GDP per worker actually increased from $40,000 to $320,000. What share of the annual growth rate of real GDP per capita was attributable to increasing physical capital per worker?
At a Premium
When a security is traded above its face value or nominal value.
Compounded Annually
Interest added to the principal sum of a deposit or loan once per year, resulting in interest on interest.
Outstanding Balance
The total amount owed on a debt, excluding interest, that remains unpaid.
Compounded Monthly
A method where interest is calculated and added to the principal balance monthly, leading to exponential growth.
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