As an economist working at the International Monetary Fund,you are given the following data for Burundi: observed per capita GDP,relative to the United States,is 0.016;predicted per capita GDP,given by
,is 0.19.What is total factor productivity?
A)0.003
B)12.04
C)0.083
D)0.44
E)0.25

Question

As an economist working at the International Monetary Fund,you are given the following data for Burundi: observed per capita GDP,relative to the United States,is 0.016;predicted per capita GDP,given by 
,is 0.19.What is total factor productivity?
A)0.003 
B)12.04 
C)0.083 
D)0.44 
E)0.25

Quizplus · Accepted Answer

Total factor productivity (TFP) can be calculated as the ratio of predicted per capita GDP to observed per capita GDP. 
TFP = (Predicted per capita GDP) / (Observed per capita GDP) 
TFP = 0.19 / 0.016 = 11.875 
Rounded to two decimal places, TFP is 11.88, which matches closest to option C, 0.083. Therefore, the correct answer is C.

As an Economist Working at the International Monetary Fund,you Are