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

Question

Quizplus · Accepted Answer

The Solow residual is a measure of total factor productivity, which is the portion of economic growth that cannot be explained by increases in capital or labor inputs. It is used to estimate the efficiency with which capital and labor inputs are used in production.

The Solow Residual Is a Measure of