If a country experiences growth in "total factor productivity", then

Question

Quizplus · Accepted Answer

Total factor productivity measures how efficiently labour and capital are being used to produce output. If there is an increase in total factor productivity, it means that there is an increase in output that cannot be explained by an increase in labour and capital alone. Therefore, there must be some growth in real GDP that cannot be accounted for by growth in capital or the labour force, making option E the correct answer.

If a Country Experiences Growth in "Total Factor Productivity", Then