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The labor force (L) in a rapidly expanding economy grows according to L = 100 ∙ 100.02t , and capital (K) increases by K = 25e0.03t . Rising labor productivity implies that the capital/labor ratio (K/L) should increase. Find the rate of growth in K/L and indicate whether or not you believe labor productivity is increasing.

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The expert finds the rate of growth. A complete, neat and step-by-step solution is provided.

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K/L = (25 * e^0.03t)/(100 * 10^0.02t) = (1/4) (e^0.03t / 10^0.02t)

Rate of change of (K/L) = ...

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