As a rough approximation, differences in capital per person explain about ________ of the difference in incomes between the richest and poorest countries, while differences in ________ explain ________.
A) one-third; wages; two-thirds
B) one-third; total factor productivity; two-thirds
C) one-third; total factor productivity; one-third
D) one-third; returns to capital; two-thirds
E) two-thirds; total factor productivity; one-third

Question

Quizplus · Accepted Answer

According to the statement, differences in capital per person explain about one-third of the difference in incomes between the richest and poorest countries, while differences in total factor productivity explain two-thirds. Therefore, the best choice is B, which states that differences in total factor productivity explain two-thirds of the difference in incomes between the richest and poorest countries.

As a Rough Approximation, Differences in Capital Per Person Explain