A technology shock could have a different impact than a natural catastrophe because ________.
A)the former would likely lower TFP and the latter raise labor productivity
B)the former would likely lower output and the latter raise production
C)the former would likely raise output and the latter would raise TFP
D)the former would likely lower labor productivity and the latter would lower TFP
E)the former would likely raise TFP and the latter would curtail production

Question

Quizplus · Accepted Answer

A technology shock typically increases Total Factor Productivity (TFP) by making production processes more efficient, thereby potentially raising output. In contrast, a natural catastrophe often damages infrastructure and resources, curtailing production capabilities and thus lowering output.

A Technology Shock Could Have a Different Impact Than a Natural