Suppose That an Economy Grows by 6 Percent, Total Factor

question 73

Multiple Choice

Suppose that an economy grows by 6 percent, total factor productivity grows by 4 percent, and the capital stock increases by 2 percent.If labor and capital are the only inputs used in production and capital contributes 25 percent to GDP, then the labor force has risen by _____.

• A)1.5 %
• B)2%
• C)4%
• D)6%
• E)8%

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Definitions:

Depreciation Schedule

A document that outlines the reduction in value of an asset over time and how it is allocated as an expense across accounting periods for tax and accounting purposes.

After-Tax Hurdle Rate

The minimum acceptable rate of return on an investment after accounting for taxes, used in capital budgeting to evaluate projects.

Non-Value-Added Activities

Processes or tasks that do not add value or contribute to the customer's requirements or the product's market worth.

Quantify

To measure or express something as a quantity or in numerical terms.