The Solow residual is a measure of
A) average labour productivity.
B) average capital productivity.
C) total factor productivity.
D) the rate of growth of real GDP.
E) the marginal product of labour.

Question

Quizplus · Accepted Answer

The Solow residual represents the portion of output growth that cannot be explained by changes in inputs such as capital and labor. It is therefore a measure of total factor productivity, which captures the efficiency with which inputs are used together to produce output.

The Solow Residual Is a Measure of