The Solow residual is
A)the waste from the production process.
B)the most common measure of productivity shocks.
C)a measure of the efficiency of the production process.
D)a measure of the proportion of involuntarily unemployed workers.

Question

Quizplus · Accepted Answer

The Solow residual is a measure of productivity shocks, which are changes in productivity that cannot be explained by changes in inputs. It is calculated as the difference between actual output and what would be predicted by the amount of labor and capital used in production.

The Solow Residual Is