The Solow Residual refers to the:
A) obsolete products left in the market due to the accelerated product life cycle.
B) less developed nations of the world being left behind due to their obsolete technology.
C) increased amount of output achievable from a given quantity of labor and capital due to technological innovation.
D) process of dumping goods in developing and underdeveloped countries at a price lower than the home-market price.

Question

Quizplus · Accepted Answer

The Solow Residual is a measure of technological progress in an economy. It represents the portion of economic growth that cannot be explained by increases in labor or capital inputs. It reflects the efficiency of the economy in converting inputs into output, and thus the level of technological innovation. Therefore, it refers to the increased amount of output achievable from a given quantity of labor and capital due to technological innovation.

The Solow Residual Refers to The