The Behaviour of the Solow Residual Suggests That When Current

question 47

Multiple Choice

The behaviour of the Solow residual suggests that when current total factor productivity increases

• A)such increases are temporary, so we can draw no conclusions about the likely behaviour of future total factor productivity.
• B)are typically temporary and have no influence on future levels of aggregate real GDP.
• C)it becomes more difficult to predict future total factor productivity.
• D)future total factor productivity is likely to decrease.
• E)future total factor productivity is also likely to increase.

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