If the U.S.total factor productivity is 1.00 and China's is 0.45,then the U.S.capital per worker is 65 percent more productive than China's.

Question

Quizplus · Accepted Answer

Total factor productivity measures the efficiency of combining inputs (capital and labor) to produce output. If the U.S. has a total factor productivity of 1.00 and China has a total factor productivity of 0.45, it means that the U.S. is more efficient in producing output compared to China. This could be due to a variety of factors such as technology, human capital, and institutional quality. Therefore, it is reasonable to conclude that the U.S. capital per worker is 65 percent more productive than China's.

If the USTotal Factor Productivity Is 1