Labor productivity equals

Question

Quizplus · Accepted Answer

Labor productivity is measured by dividing real GDP by aggregate labor hours. This gives the amount of output produced per unit of labor input. Option A is incorrect because it divides real GDP by capital stock which measures the amount of physical capital available in the economy. Option C is incorrect because it divides real GDP by the working-age population which includes both employed and unemployed individuals. Option D is incorrect because it divides total wages, which is a measure of labor income, by real GDP which is a measure of output.

Labor Productivity Equals