The growth rate of total output equals
A)Gross investment minus depreciation.
B)Real GDP per capita growth rate.
C)The growth rate of the labor force plus the growth rate of productivity.

Question

Quizplus · Accepted Answer

The growth rate of total output, or real GDP, is determined by the growth rate of the labor force, which increases the number of workers producing goods and services, and the growth rate of productivity, which increases the efficiency and output of each worker. Therefore, option C is the correct choice. A is incorrect because gross investment minus depreciation only represents net investment, not the overall growth rate of output. B is incorrect because real GDP per capita only measures output per person, not the total output of the economy.

The Growth Rate of Total Output Equals