Question

According to our growth accounting forμla, less than half of U.S. output growth in the early 20th century was explained by labor and capital increases.

a) True
b) False

Answer 1

Less than half of U.S. output growth in the early 20th century was explained by labor and capital increases.

Step-by-step explanation:

The statement is True.

According to the provided information, less than half of U.S. output growth in the early 20th century was explained by labor and capital increases. The growth was primarily driven by improvements in infrastructure, equipment, and technological advancements in physical and human capital. The population also tripled during this period, resulting in higher skill levels and larger amounts of physical capital per worker.

Overall, these factors contributed to a significant increase in potential GDP for the U.S. economy.