a) Consider an economy in which the labour force grows by 2.7 percent per annum, while the capital stock grows by 4 percent per annum. Suppose 55 percent of national income goes to labour and 45 percent to capital. If the residual were R = 0, what rate of growth would the economy achieve? ii. Calculate the value of the residual (R) if the country's actual rate of growth has been 4.5 i. percent per annum.

Choose the following opton:  1) In the very long run, across the next fifty years, a country’s economic standard of living as measured by Real GDP Per Person can grow steadily as a result of sustained growth in one of the following two values. The correct focus of growth policy will be to promote: (a)  Labor Productivity          (b)  Total Labor Effort   2) The correct answer to Q#1 is a consequence of which feature of any country’s economy.  In the very long run, fifty years and beyond: a) Total Labor Effort (Aggregate Labor Hours) can grow faster than a country’s Population. b) Total Labor Effort (Aggregate Labor Hours) cannot grow faster than a country’s  Population.