Adding together the growth rate of labor input and the growth rate of labor productivity yields the growth rate of
A)nominal GDP.
B)actual GDP.
C)potential GDP.
D)final GDP.

Question

Quizplus · Accepted Answer

The combination of labor input and labor productivity growth rates determines the growth rate of potential GDP, which represents the maximum level of output achievable without putting pressure on inflation. Nominal and actual GDP are not affected solely by labor input and labor productivity, but also by changes in prices and other factors that affect production. Final GDP is not a commonly used economic term.

Adding Together the Growth Rate of Labor Input and the Growth