CFA Practice Question

There are 253 practice questions for this study session.

CFA Practice Question

According to neoclassical model, growth in labor productivity depends on:

I. capital deepening.
II. technological progress.
III. labor force growth.
Correct Answer: I and II

User Contributed Comments 3

User Comment
danubian Why capital deepening as well? The formula is : growth in TFP/1 - alpha
akirchner1 Workers (labor) use things like machines and computers (capital) etc to be productive. The worker can get more output done than if they didn't have those. But a worker can only use so many machines and computers to complete a job. To complete the job more efficient or faster, technology improvements need to be made to the machine or computer to increase the workers output.
davidt87 alpha is capital's share of output. so an increase in alpha will make the numerator smaller and therefore the output per worker greate
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