The Schweser Study Notes say that we should multiple the terms of the function (T, K, L) but when I look at the answer for question #70 in the Schweser Afternoon Exam 1, the terms (T, K, L) are summed.
Which is correct?
The Schweser Study Notes say that we should multiple the terms of the function (T, K, L) but when I look at the answer for question #70 in the Schweser Afternoon Exam 1, the terms (T, K, L) are summed.
Which is correct?
it is added because they have asked growth rate of gdp (which is)= growth rate of technology ( total factor productivity) + alpha * g rate of capital + 1-Alpha * g rate of labor ( los 15.e) and not cobb douglas production function ( los 15.d) which is t *k RAISE TO POWER Alpha * L RAISE TO POWER 1- Alpha.
hope this helps.