I’d just like to check: for the benefit of those who don’t have the paper, the question asks “for which country does technological progress contribute the most to real potential GDP”, and provides the numbers neccersary to work out the growth in TFP
This can be worked out by observing Growth in Potential GDP = Growth in TFP + (alpha) Growth Rate in Capital + (1-alpha) Growth Rate in Labour.
When I’m looking at this question, I can work out Growth in TFP for the countries provided - however I’m unsure if it would be more accurate to answer it based on a proportion of GDP growth (i.e if country ABC had 5 % potential GDP, with 1 % being from TFP, vs country XYZ having 1 % potential GDP, 0.9 % of which being from TFP, what should be the answer?)
To put it more clearly, should my answer be based on which country has the largest absolute percentage value? or would CFAI expect the answer to be based on Growth in TFP/Growth in Potential GDP (i.e as a proportion of how much it contributed vis-a-vis other factors?). MM answer sheet implies the former (selecting the one with the largest value rather than the contribution percentage) but I’m not sure of CFAI’s stance on such a question. Any input would be appreciated.