If both total employment and total output always grew by 2 percent each year,what would the annual growth in labor productivity in an economy be over a decade?
A)0 percent
B)2 percent
C)10 percent
D)20 percent
E)2 percent times the size of the labor force

Question

Quizplus · Accepted Answer

Labor productivity is calculated as total output divided by total employment. If both grow at the same rate (2% annually), the ratio remains constant, resulting in 0% growth in labor productivity.

If Both Total Employment and Total Output Always Grew by 2