5. Suppose that the share of GDP paid to capital was always equal to 25% and the remaining 75% was going to labor. That

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5 Suppose That The Share Of Gdp Paid To Capital Was Always Equal To 25 And The Remaining 75 Was Going To Labor That 1 (32.87 KiB) Viewed 47 times

5. Suppose that the share of GDP paid to capital was always equal to 25% and the remaining 75% was going to labor. That is, Y₁ = A₁K0.25 10.75 where A is total factor productivity. If, over the course of 20 years, the capital stock had been growing at 2% per year, the labor force had been growing at 3% per year, and GDP had been climbing at a 3% per year, then total factor productivity must have been (a) growing at 7% per year. (b) growing at 5% per year. (c) growing at 0.25% per year. (d) falling at 5% per year. (e) falling at 0.75% per year.