Context of a standard production function

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If, in the context of a standard production function, Y = F (K,N) where K represents physical capital and N represents raw labor, we were to interpret the Solow residual (?A/A) as “technological progress,” we would be in error. What, besides technological progress, would this residual catch? How could you expand the model to eliminate this problem?

Reference no: EM131000829

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