Differences in factor accumulation and/or differences in production efficiency must account for all international differences in:

Question

Quizplus · Accepted Answer

Differences in factor accumulation and production efficiency can account for international differences in income per person. Human capital and physical capital are only factors that contribute to factor accumulation, while saving rates and population growth rates can impact factor accumulation and production efficiency, but they are not the sole determinants. Labour efficiency is a component of production efficiency but does not account for all international differences in income per person.

Differences in Factor Accumulation And/or Differences in Production Efficiency Must