2013 mock exam Question 5–cobb douglas GDP Growth function ignores Growth in total population? why?
If you are given following two in a question then why are we just picking “Growth in labor input.” and ignoring “Growth in total population” altogether.
Growth in total population
Growth in labor input.
IN 2013 mock exa-m Question 5- we are ignoring “Growth in total population” why?
for the purposes of output and GDP growth- population growth does not equal labor force growth.
think about the participation rate as it relates to the unemployment rate… technically, the population of a country can increase while the labor force stays constant or shrinks…
Because growth in labor input is all you need
okay…since they gave us the employment rate so I can asssume…population growth has no impact on increase in labor input.
Labour input already factor in the growth in the population