International differences in income per person in accounting terms must be attributed to differences in either and/or .
A)factor accumulation; production efficiency.
B)constant returns to scale; the marginal product of.
C)capital unemployment rates; depreciation rates.
D)consumption; interest rates.

Question

Quizplus · Accepted Answer

According to the Solow model, income per person is determined by the factors of production (capital and labor) and their efficiency in production (known as total factor productivity). Differences in income per person across different countries can therefore be attributed to differences in either factor accumulation (the amount of capital and labor in a country) or production efficiency (the technology used to turn inputs into outputs). Therefore, option A is the correct choice. The other options are not relevant to the Solow model and/or do not explain international differences in income per person.

International Differences in Income Per Person in Accounting Terms Must