If the labor force is growing at a 3 percent rate and the efficiency of a unit of labor is growing at a 2 percent rate, then the number of effective workers is growing at a rate of:
A) 2 percent.
B) 3 percent.
C) 5 percent.
D) 6 percent.

Question

Quizplus · Accepted Answer

The rate of growth of effective workers is the sum of the rates of growth of labor force and efficiency of each worker. Therefore, the growth rate of effective workers is 3 percent (labor force growth rate) + 2 percent (efficiency growth rate) = 5 percent.

If the Labor Force Is Growing at a 3 Percent