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Answer :
To calculate the growth rate of per capita output in this economy, we need to consider the factors that contribute to the change in output per worker.
The growth rate of per capita output can be calculated using the following formula:
Growth rate of per capita output = Growth rate of capital stock per effective worker + Productivity growth rate - Population growth rate - Depreciation rate
Given the following values:
Growth rate of capital stock per effective worker = 2.5%
Productivity growth rate = 4.1%
Population growth rate = 1%
Depreciation rate = 15%
Substituting the values into the formula, we get:
Growth rate of per capita output = 2.5% + 4.1% - 1% - 15%
Simplifying the expression, we have:
Growth rate of per capita output = -9.4%
Therefore, the growth rate of per capita output in this economy is -9.4%.
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