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Unformatted text preview: A similar rule applies to a variable that is the quotient of two other variables. For example, if Z=X/Y then growth of Z = growth of X – growth of Y. Regarding the production function example, suppose alpha is 0.5: • If A grows at 5% then all else the same Y grows at 5%. • If L grows at 5% then all else the same Y grows at 2.5%. • If K grows at 5% then all else the same Y grows at 2.5%....
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This note was uploaded on 11/08/2011 for the course ECO 3203 taught by Professor Yang during the Fall '10 term at University of Central Florida.
- Fall '10