Question

For the years 1995 to 2007, if output per person in the private sector grew 2.7 percent, capital intensity grew 1.1 percent, and labor composistion grew 0.2 percent, what was the growth rate of total factor productivity

Answer 1

Answer:

1.4%

Explanation:

The computation of the growth rate of total factor productivity is shown below:

Growth rate of total factor productivity = Private sector grew rate - capital intensity grew rate - labor composition grew rate

= 2.7% - 1.1% - 0.2%

= 1.4%

By deducting the  capital intensity grew rate and the labor composition grew rate from the private sector grew rate we can get the growth rate of total factor productivity