One problem with total factor productivity revolves around the measurement of combined productivity of all inputs.

Question

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Total factor productivity (TFP) measures the combined productivity of all inputs, including labor, capital, and technology. One issue with TFP is the difficulty in accurately measuring the contribution of each input to overall productivity, as well as the potential interactions and complementarities between them. Therefore, the measurement of TFP can sometimes be imprecise, leading to concerns about its validity as a measure of productivity.

One Problem with Total Factor Productivity Revolves Around the Measurement