An increase in labor productivity necessarily means an increase in real GDP per capita if:
A)real GDP increases.
B)the employment growth rate is greater than the population growth rate.
C)the employment growth rate is less than the population growth rate.
D)the size of the labor force remains constant.
E)real GDP increases more rapidly than nominal GDP.

Question

Quizplus · Accepted Answer

An increase in labor productivity implies that each worker is producing more output. If the employment growth rate is greater than the population growth rate, it means a larger proportion of the population is working and producing more per capita, thus increasing real GDP per capita.

An Increase in Labor Productivity Necessarily Means an Increase in Real