Question

The amount of human capital per worker grows by 6% a year in a country. Estimates of the aggregate production function for the country show that holding physical capital per worker and technology constant, for each 1% increase in human capital per worker, output per worker increases by 0.5%. The growth in human capital per worker in the country accounts for approximately _____% of productivity growth per year. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 0.5 3 6 30

Answer 1

3%

Step-by-step explanation:

If each 1% of increase in human capital per worker results in a 0.5% increase in productivity, a 6% increase in human capital per worker would result in a = 6% x 0.5 = 3% increase in productivity growth per year.

Human capital includes all the skills and knowledge that workers may gain through education, training and experience.

Answer 2

The growth in human capital per worker in the country accounts for approximately 3% of productivity growth per year.

Step-by-step explanation: