Suppose that the share of population employed in Country C is 50 percent, and that Countries C and D have the same real GDP per capita. Based on the information in the table, what share of Country D's population must be employed?

Question

Quizplus · Accepted Answer

To find real GDP per person, multiply the average output each worker produces times the percentage of population employed. In this case, average labor productivity in Country C is $25,000 and share of population employed is 0.50, so real GDP per person is $12,500. For Country D to also have real GDP per person of $12,500, then the share of population working × the average labor productivity of $50,000 must be $12,500. Solving for the share of population working, by dividing each side by the real GDP, we get $12,500 / $50,000 = .25 or 25 percent.

Suppose That the Share of Population Employed in Country C