The Time Series of production yielded the trend equation Y=136e^(0.021T),where Y=Production,T=Time.From…
For an exponential trend Y = a·e^(bT), the instantaneous (compound) growth rate is d(ln Y)/dT = b. Here b = 0.021, so Y grows by 0.021 × 100 = 2.1% per unit of time. The…
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The Time Series of production yielded the trend equation Y=136e^(0.021T),where Y=Production,T=Time.From this equation growth rate of Y in percent terms is:
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Correct answer B
For an exponential trend Y = a·e^(bT), the instantaneous (compound) growth rate is d(ln Y)/dT = b. Here b = 0.021, so Y grows by 0.021 × 100 = 2.1% per unit of time. The figure 0.021 is the growth rate as a fraction, not in percent, and 21 or 0.21 misplace the decimal point. Strictly, the discrete growth from one period to the next is e^0.021 − 1 ≈ 2.12%, which is very close to 2.1%.
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UGC NET Economics