The standard of living rises at a slower pace than labor productivity if

Question

Quizplus · Accepted Answer

Option B is the correct answer because if n (population growth rate) is less than q (labor productivity growth rate), then there will be an increase in output per capita, which is a measure of the standard of living. However, the rate of increase of the standard of living will be slower than the increase in labor productivity. Therefore, the standard of living will rise at a slower pace than labor productivity. Option A is incorrect because when n=q, the standard of living and labor productivity will grow at the same rate. Option C is incorrect because if n>q, then there will be a decrease in output per capita and, hence, a decrease in the standard of living. Option D is incorrect because the standard of living is affected by the relative size of n and q.

The Standard of Living Rises at a Slower Pace Than