Productivity growth is important because _____
A) it is the only way an economy can increase GDP.
B) a small decrease in productivity growth causes a large decline in GDP.
C) a large increase in productivity growth causes a small decrease in GDP.
D) it causes an increase in the quantity of all resources available in an economy.
E) it ultimately increases a nation's standard of living.

Question

Quizplus · Accepted Answer

Productivity growth is important because it leads to an increase in a nation's standard of living. As productivity increases, more goods and services can be produced by the same number of resources, which results in lower prices and higher purchasing power for consumers. This increased production also leads to increased profits for firms, which can then invest in further productivity-enhancing technologies and create more jobs, further stimulating economic growth.

Productivity Growth Is Important Because _____