Economic Performance Unit Test

Question

14 of 1814 of 18 Items

Question
Which of the following represents an increase in labor productivity within a country?(1 point)
Responses

GDP increased from 200 billion dollars to 400 billion dollars, while total labor hours increased from 50 million to 75 million.
GDP increased from 200 billion dollars to 400 billion dollars, while total labor hours increased from 50 million to 75 million.

GDP decreased from 400 billion dollars to 200 billion dollars while total labor hours decreased from 75 million year to 50 million.
GDP decreased from 400 billion dollars to 200 billion dollars while total labor hours decreased from 75 million year to 50 million.

GDP increased from 200 billion dollars to 400 billion while total labor hours increased from 50 million to 100 million.
GDP increased from 200 billion dollars to 400 billion while total labor hours increased from 50 million to 100 million.

GDP decreased from 400 billion dollars to 200 billion dollars, while total labor hours decreased from 100 million to 50 million.

Answer 1

To determine which option represents an increase in labor productivity, we need to calculate labor productivity as GDP divided by the total labor hours.

1. For the first option:

   • GDP increase: 200 billion to 400 billion
   • Labor hours increase: 50 million to 75 million
   • Labor Productivity = GDP / Labor Hours =
     • Before: 200 billion / 50 million = 4,000
     • After: 400 billion / 75 million = 5,333.33
   • Productivity increased

2. For the second option:

   • GDP decreased: 400 billion to 200 billion
   • Labor hours decreased: 75 million to 50 million
   • Labor Productivity =
     • Before: 400 billion / 75 million = 5,333.33
     • After: 200 billion / 50 million = 4,000
   • Productivity decreased

3. For the third option:

   • GDP increase: 200 billion to 400 billion
   • Labor hours increase: 50 million to 100 million
   • Labor Productivity =
     • Before: 200 billion / 50 million = 4,000
     • After: 400 billion / 100 million = 4,000
   • Productivity stayed the same

4. For the fourth option:

   • GDP decreased: 400 billion to 200 billion
   • Labor hours decreased: 100 million to 50 million
   • Labor Productivity =
     • Before: 400 billion / 100 million = 4,000
     • After: 200 billion / 50 million = 4,000
   • Productivity stayed the same

The only option reflecting an increase in labor productivity is the first option.