The Solow Residual refers to
A) the increased amount of output achievable from a given quantity of labor and capital due to technological innovation.
B) the less developed nations of the world being left behind due to their slower development of technology.
C) obsolete products left in the market due to the accelerated product life cycle.
D) the reduction in the amount of inventory needed by manufacturing firms due to technological improvements in inventory management.

Question

Quizplus · Accepted Answer

The Solow Residual, also known as Total Factor Productivity, is the amount of output that cannot be explained by the amount of capital and labor inputs alone. It is often attributed to technological innovation, meaning that it represents the increased efficiency and effectiveness of production due to advancements in technology. Therefore, choice A is the best answer.

The Solow Residual Refers to