GDP can be represented by the equation: GDP = F x (Fe/F)x (GDP/Fe), where F represents the total factor supply and Fe represents the number of employed factors. The term (GDP/Fe)represents
A)factor utilization.
B)average factor productivity.
C)income per person.
D)output per capital.
E)factor supply per level of output.

Question

Quizplus · Accepted Answer

The term (GDP/Fe) represents the average factor productivity, which is a measure of the efficiency of producing output given the number of employed factors. It indicates the output produced per unit of employed factor, thus representing the productivity level of the factors of production.

GDP Can Be Represented by the Equation: GDP = F