The economy has grown by 4% per year over the past 30 years. During the same period, the labor force has grown by 1% per year and the quantity of physical capital has grown by 5% per year. Each 1% increase in physical capital per worker is estimated to increase productivity by 0.4%. Assume that human capital has not changed during the past 30 years. How much has growing physical capital per worker contributed as a percentage of total productivity growth

Physical capital per worker contributed to productivity growth = Increased productivity per 1% physical capital * Quantity of physical capital growth rate

- Increased productivity per 1% physical capital = 0.4%

- Quantity of physical capital growth rate = 5%

So, Physical capital per worker contributed to productivity growth = 0.4%*5% = 2%.

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deebikamadhivanan deebikamadhivanan · Answer 2 · 2022-02-23T04:14:08+01:00

deebikamadhivanan deebikamadhivanan

23-02-2022

The techniques, formulas, and essential explanations can be found in the archive provided below. If you have any questions, please ask them and I will gladly answer them.

How much contribution was made as total productivity growth?

Output per worker has grown by 4% because output has grown by 4% and labor has grown by 1%.

For more information about productivity growth, refer below

https://brainly.com/question/6142956

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