Consider a small economy with real GDP of $1 billion and the total number of hours worked equal to 5 million.Which of the following is the best measure of labour productivity in this economy?
A)real GDP per hour worked = $20
B)real GDP per employed worker = $20
C)real GDP per hour worked = $200
D)real GDP per employed worker = $200
E)Not able to determine from the information provided

Question

Quizplus · Accepted Answer

Labour productivity is measured by real GDP per hour worked. Therefore, choice C (real GDP per hour worked = $200) is the best measure of labour productivity in this economy as it calculates the output per unit of input (hour worked) which is a more accurate representation of productivity. The other choices don't take into account the number of hours worked and could be misleading.

Consider a Small Economy with Real GDP of $1 Billion