Total factor productivity is the ratio of
A) skilled labor to unskilled labor.
B) wartime productivity to peacetime productivity.
C) manufacturing productivity to service productivity.
D) agricultural productivity to industrial productivity.
E) the economy's output to its stock of capital and labor.

Question

Quizplus · Accepted Answer

Total factor productivity (TFP) is a measure of how efficiently labor and capital are being used in the production process. It is calculated as the ratio of the economy's output to its stock of capital and labor, and therefore answer E is the correct choice. Choice A, B, C, and D are all incorrect because they do not relate to the definition of TFP.

Total Factor Productivity Is the Ratio of