Suppose that an economy grows by 4 percent, total factor ...

[krzymel]

Suppose that an economy grows by 4 percent, total factor productivity grows by 3 percent, and the labor force increases by 6 percent. If labor and capital are the only inputs and labor contributes 40 percent to GDP, then the stock of capital must have _____.
 a. fallen by 5
  b. fallen by 3.33
  c. fallen by 2.33
  d. risen by 3
  e. risen by 1.8

Question 2

If the income elasticity of demand for good A was 3.9 and the income elasticity of demand for B was 0.2:
 a. Both good A and good B are normal.
 b. Both good A and good B are inferior.
 c. Good A is normal and good B is inferior.
  d. Good A is inferior and good B is normal.

[morganmarie791]

Answer to Question 1

c

Answer to Question 2

a