Given data on capital (K),labor (N),and output (Y),and estimates of capital's share of output (a),the Solow residual is measured as A)Y K^aN¹^-a B)(Y K^a)/ N¹^-a C)Y / (K^aN¹^-a) D)1/(Y K^aN¹^-a)

Question

Quizplus · Accepted Answer

The Solow residual measures total factor productivity and is calculated as output (Y) divided by the inputs raised to their respective shares in output, which are capital (K) to the power of a and labor (N) to the power of (1-a).

Given Data on Capital (K),labor (N),and Output (Y),and Estimates of Capital's