If a country’s labor and capital grow at the same rate, is this likely to have the same impact on the growth rate of output?
a. Yes. If labor and capital are growing at the same rate, the impact on the growth rate of output is the same.
b. No. Growth in labor always has a bigger impact than growth in capital.
c. No. Growth in capital always has a bigger impact than growth in labor.
d. It depends on whether the capital share of output is larger than the labor share of output.
Get Answers For Free
Most questions answered within 1 hours.