What happens to the growth rate of real output

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Reference no: EM132194172

Question -

a. Assume that, over a 10-year period, the growth rate of capital is 4 percent, the growth rate of employment is 2 percent, and the growth rate of real output is 5 percent. Calculate the growth rate of technology.

b. Suppose that a permanent cut in the budget deficit increases investment and the growth rate of capital rises by 1 percent. How much does the growth rate of output increase?

c. Suppose that a tax reduction increases the supply of labor by 1 percent in one year. What happens to the growth rate of real output?

Reference no: EM132194172

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