When would an increase in labour productivity necessarily lead to an increase in real GDP per capita?
A) when real GDP increases
B) when the employment growth rate is greater than the population growth rate
C) when the employment growth rate is less than the population growth rate
D) when the size of the labour force remains constant

Question

When would an increase in labour productivity necessarily lead to an increase in real GDP per capita?  
A) when real GDP increases 
B) when the employment growth rate is greater than the population growth rate 
C) when the employment growth rate is less than the population growth rate 
D) when the size of the labour force remains constant

Quizplus · Accepted Answer

An increase in labor productivity leads to an increase in real GDP per capita when the employment growth rate is greater than the population growth rate. This is because more people are working and producing more per person, which increases the total output per capita if the population isn't growing as fast as employment.

When Would an Increase in Labour Productivity Necessarily Lead to an Increase