If the growth rate of resources is zero and real output is growing at 4 percent, then total factor productivity has risen by 4 percent.

Question

Quizplus · Accepted Answer

When the growth rate of resources is zero, the only source of economic growth is through technological progress which is captured by total factor productivity (TFP). Therefore, if real output is growing at 4 percent, it implies that TFP has also risen by 4 percent.

If the Growth Rate of Resources Is Zero and Real