Question

What is growth accounting? To what extent have increases in U.S. real GDP resulted from more labor inputs? From greater labor productivity? Rearrange the following contributors to the growth of productivity in order of their quantitative importance: economies of scale, quantity of capital, improved resource allocation, education and training, and technological advance.

Answer 1

The following contributors to the growth of productivity in order of their quantitative importance are rearranged:

quantity of capital,

economies of scale,

technological advance.

improved resource allocation,

education and training,

Explanation:

Growth accounting is used in economics as a process of measurement of contributions from different factors that result in economic growth. This is computed indirectly for the rate of technological progress which is measured as a residual in the economy.

Labor inputs have increased the GDP of USA manifold. The greater labor productivity means that the economy is more efficient , in the sense of being more productive which has a positive effect on the GDP.