Question

21.
According to the U.S. Bureau of Labor Statistics, total factor productivity in the U.S. private nonfarm business sector decreased by 1.2 percent in 2022. Which of the following statements correctly explains this outcome?

Choose TWO correct answers.

Select A
Outputs decreased but were higher than inputs of labor and capital.

Select B
Labor and capital, overall, did not impact total factor productivity in 2022.

Select C
Outputs increased, and inputs of capital and labor decreased.

Select D
Inputs of capital and labor were more than the increase of outputs.

Select E
Both capital and labor growth outpaced output growth.

...

Answer 1

Correct answers: D and E.

Reason: Total factor productivity falls when the growth of inputs (labor and capital) exceeds output growth. D states inputs grew more than output increases, and E states both capital and labor growth outpaced output growth — both describe why TFP would decline.