The Solow residual will fall even if technology has not changed if there is:
A) population growth.
B) endogenous growth.
C) labor hoarding.
D) balanced growth.

Question

Quizplus · Accepted Answer

The Solow residual, a measure of productivity growth in an economy, can fall due to labor hoarding, which is when companies retain more employees than necessary, leading to a decrease in apparent productivity without any change in technology.

The Solow Residual Will Fall Even If Technology Has Not