Problem
Choose a country in which you are interested or one you are assigned. This problem will give you more practice in calculating TFP. Go to worldbank website, click on "Data" at the top of the page and then choose "Data by Country" and then choose "AAGs." Find your country in the drop-down menu.
a. Calculate the TFP for your country for most recent year using: percentage change in GDP per capita (next to last line in the yellow section), percentage change in gross capital formation (this is for the K variable; it's the next to last line on the first page and it is a percentage, too) and the percentage change in labor force (it won't be for just one year; rather it is shown as an average); this is your L variable (you'll find it near the top of page 1 of the data). Use 28 percent as the weight for the contribution of the physical capital input to production.
b. How much of economic growth has been intensive and how much extensive?
c. What does the TFP value you have calculated mean?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.