Posted by **Robson** on Saturday, September 15, 2012 at 7:44pm.

Can someone point me in the right direction on how to solve this?

1. Suppose you have an economy with two factors of production (capital and labor), and suppose that capital's share of national income is 40% and that labor's share is 60%. Assume also that the annual growth rates of labor and capital are, respectively, 5% and 3%.

A. If technology does not increase over time, how much does output grow each year?

B. If technology grows at a 2% rate each year, how much does output grow each year.

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