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Question: a where the delta symbols denote changes so that ...

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-a where the delta symbols denote changes (so that Δ Y/Y describes the percentage change in Y). Y is output, K, L, and T are capital, labor, and resource inputs, respectively. R is the growth-accounting residual or the measure of TFP. a, b, and c are weights (1) 13 pointsl Your 14 year-old sibling is a very intelligent person but knows nothing about eco- nomics. Explain this equation to your sibling.

(2) |2 pointsl Explain what the weights a, b, and cdescribe. Consider the experience of the economy summarized in the following table ear 40 80 120 20 60 90 40 50 60 100 110 110 (3) [4 points Assumea0.20, b 0.60, c0.20. Compute R for growth between year 1 and year 2, and for growth between year 2 and year 3 0.60, c 0.10. Compute R again for growth between year 1 (4) 15 points! Assume a-0.30, b and year 2, and for growth between year 2 and year 3. Why is your answer different? Explain n economic terms (5) [3 points] Suppose I gave you data on Y, the weights, and the labor input L. Sketch, in words, a method for speculating about R without getting it too wrong. [Hint: you need to make assumptions about K/K and ДТ/Tj

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