Question 1
Suppose that growth in output that can be attributed to growth in labor and capital is 6%. If output grows at a rate of 6%, it must be the case that
◦ the economy is not experiencing technological progress.
◦ growth in labor force exceeds growth in capital.
◦ growth in capital exceeds growth in labor.
◦ the economy is experiencing technological progress.
Question 2
Suppose that growth in output that can be attributed to growth in labor and capital is 2%. If output grows at a rate of 5%, it must be the case that
◦ growth in labor exceeds growth in capital.
◦ growth in capital exceeds growth in labor.
◦ the economy is experiencing technological progress.
◦ the economy is not spending enough on acquiring human capital.