Suppose that over the past ten years productivity grew faster in Cayo than in San Marcos and the population of both countries was unchanged. What can we conclude?

Question

Quizplus · Accepted Answer

Productivity is a measure of output per worker, so if productivity grew faster in Cayo than in San Marcos and the population was unchanged, then real GDP per person must have grown faster in Cayo. However, we cannot conclude that real GDP per person in Cayo is necessarily higher than in San Marcos, as it depends on their starting points. Additionally, we cannot conclude anything about the capital stock in either country.

Suppose That Over the Past Ten Years Productivity Grew Faster