Which of the following correctly explains how an increase in productivity leads to a change in a country's GDP?

Question

(1 point)
• An increase in productivity reduces the wages of workers and this increases a country's GDP.
• An increase in productivity raises the tax revenue received by the government and this increases a country's GDP.
An increase in productivity increases the amount of final goods and services that can be produced, and that increases GDP.
An increase in productivity can lead to higher profits for business, which decreases GDP.

Answer 1

An increase in productivity increases the amount of final goods and services that can be produced, and that increases GDP.