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If 40,000 worker-hours produced a total output of $400,000 in an economy, then the labor productivity is Multiple Choice a) $10 per worker-hour
If 40,000 worker-hours produced a total output of $400,000 in an economy, then the labor productivity is
Multiple Choice
a) $10 per worker-hour.
b) $40 per worker-hour.
c) $16 per worker-hour.
d) $160 per worker-hour.
A nation's real GDP was $250 billion in Year 1 and $260 billion in Year 2. Its population was 120 million in Year 1 and 125 million in Year 2. What is its real GDP growth rate in Year 2?
Multiple Choice
a) 4 percent
b) 10 percent
c) 3.8 percent
d) 8.3 percent
Expert Solution
Computation of the labor productivity:-
Labor productivity = Real GDP (Total output) / Total number of workers-hours
= $400,000 / 40,000
= $10 per worker hour
Correct option is a) $10 per worker-hour
Computation of the real GDP growth rate in year 2:-
Real GDP growth rate in year 2 = (Real GDP in year 2 - Real GDP in year 1) / Real GDP in year 1
= ($260 - $250) / $250
= $10 / $250
= 4%
Correct option is a) 4 percent
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