Whereas United
  States eco-

nomic productivity grew at an annual

rate of 3 percent from 1945 to 1965,

Line
it has grown at an annual rate of

(5)
only about 1 percent since the early

1970’s. What might be preventing

higher productivity growth? Clearly,

the manufacturing sector of the

economy cannot be blamed. Since

(10)
1980, productivity improvements

in manufacturing have moved the

United States from a position of

acute decline in manufacturing

to one of world prominence.

(15)
Manufacturing, however, consti-

tutes a relatively small proportion

of the economy. In 1992, goods-

producing businesses employed

only 19.1 percent of American

(20)
workers, whereas service-producing

businesses employed 70 percent.

Although the service sector has

grown since the late 1970’s, its

productivity growth has declined.

(25)
Several explanations have been

Offered for this declined and for the

discrepancy in productivity growth

between the manufacturing and

service sectors. One is that tra-

(30)
ditional measures fail to reflect

service-sector productivity growth

because it has been concentrated

in improved quality of services.

Yet traditional measures of manu-

(35)
facturing productivity have shown

significant increases despite the

undermeasurement of quality,

whereas service productivity has

continued to stagnate. Others argue

(40)
that since the 1970’s, manufacturing

workers, faced with strong foreign

competition, have learned to work

more efficiently in order to keep their

jobs in the United
  States, but service

(45)
workers, who are typically under

less global competitive pressure,

have not. However, the pressure on

manufacturing workers in the United

States to work more efficiently has

(50)
generally been overstated, often

for political reasons. In fact, while

some manufacturing jobs have been

lost due to foreign competition, many

more have been lost simply because

(55)
of slow growth in demand for manu-

factured goods.

Yet another explanation
blames

the federal budget deficit: if it were

lower, interest rate would be lower

(55)
too, thereby increasing investment

in the development of new technol-

ogies, which would spur productivity

growth in the service sector. There

is, however, no dearth of techno-

(60)
logical resources, rather, managers

in the service sector fail to take

advantage of widely available skills

and machines. High productivity

growth levels attained by leading-

(65)
edge service companies indicate

that service sector managers

who wisely implement available

technology and choose skillful

workers can significantly improve

(70)
their companies’ productivity.

The culprits for service-sector

productivity stagnation are the

forces－such as
corporate

takeovers and unnecessary

(75)
governmental regulation－that

distract managers from the task

of making optimal use of available

The author of the passage would be most
likely to agree with which of the following statements about productivity
improvements in United States
service companies?

A      Such improvements would be
     largely attributable to efficiencies resulting from corporate takeovers.

B      Such improvements would
     depend more on wise implementation of technology than on managers’ choice
     of skilled workers.

C     Such improvements would be
     more easily accomplished if there were fewer governmental regulations of
     the service sector.