Suppose Than an Economy Has Output Y = AK0

question 20

Multiple Choice

Suppose than an economy has output Y = AK0.3L0.7, that Y equals $19 trillion, capital K is $27 trillion, and labor L is 125 million workers. Given this information, what is the closest approximation of total factor productivity A?

• A) less than 0.01
• B) around 0.25
• C) roughly 0.33
• D) close to 0.4
• E) exactly 144

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