Suppose that during the last year growth in output due to growth in labor and capital was 4%. If output grew at a rate of 6%, it must be the case that:
a) the ratio of capital to labor increases by 2%
b) capital grew faster than labor
c) labor grew faster than capital
d) technological progress increased by 2%
This question makes no sense to me because the options I dont understand. I think it is D but I am not sure. Where did they get 2% from? Just the difference??
a) the ratio of capital to labor increases by 2%
b) capital grew faster than labor
c) labor grew faster than capital
d) technological progress increased by 2%
This question makes no sense to me because the options I dont understand. I think it is D but I am not sure. Where did they get 2% from? Just the difference??