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Discussion

An economy's falling energy intensity is presented as evidence of an efficiency programme's success. The point to check is

  • A.whether energy prices have risen over the period
  • B.whether the intensity has been quoted in the correct units
  • C.whether the sectoral mix of the economy has changed
  • D.whether the population has grown over the period

Answer: C

A shift from manufacturing toward services improves the ratio without a single measure having been implemented, so the two effects must be separated before credit is claimed. Decomposing the change into structural and intensity components is the standard technique.

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