The Solow residual helps explain growth that derives from
A)increasing the size of the labor force.
B)increasing the size of the capital stock.
C)increasing the capital-labor ratio.
D)anything except increases in the size of the labor force or the capital stock.

Question

Quizplus · Accepted Answer

The Solow residual measures the portion of economic growth that cannot be attributed to increases in the labor force or by increasing the size of the capital stock. Instead, it is associated with technological progress, improvements in management practices, or other factors that lead to increased efficiency in production.

The Solow Residual Helps Explain Growth That Derives from