Some economists argue that the productivity slowdown from mid-1970s to mid-1990s actually didn't happen,but just "appeared" to happen because
A)exports were becoming a less important part of the economy,and it was hard to measure decreases in output from exports.
B)new environmental laws had passed and forced firms to spend to reduce pollution,and this spending did not raise output.
C)increased spending on health and safety raised worker productivity.
D)of the high inflation levels of the 1970s.

Question

Quizplus · Accepted Answer

The argument that the productivity slowdown from mid-1970s to mid-1990s didn't actually happen is based on the fact that the increased spending to reduce pollution due to new environmental laws did not raise output. This suggests that the slowdown in productivity growth was only apparent, as the spending on pollution reduction suppressed the output growth that would have been seen otherwise. Therefore, option B is the best choice. The other options are not supported by evidence and are not as well-reasoned as option B.

Some Economists Argue That the Productivity Slowdown from Mid-1970s to Mid-1990s