A nation's technological gains have increased labor productivity and, as a result, the average number of hours worked each week has been falling. How do Gross Domestic Product (GDP) calculations account for this shortening of the average workweek?
A) Real Gross Domestic Product (GDP) does not factor in an increase in leisure time but per capita real Gross Domestic Product (GDP) does.
B) Neither real Gross Domestic Product (GDP) nor per capita real Gross Domestic Product (GDP) includes the increase in leisure time that results, so the nation's actual economic growth will be overstated.
C) Gains in leisure time are dollar-valued and included in real per capita Gross Domestic Product (GDP) gains.
D) Gains in leisure time are not included in Gross Domestic Product (GDP), so any increase in real per capita Gross Domestic Product (GDP) will understate the nation's actual economic growth.

Question

Quizplus · Accepted Answer

The gains in leisure time resulting from increased labor productivity are not included in GDP calculations, so any increase in real per capita GDP will understate the nation's actual economic growth.

A Nation's Technological Gains Have Increased Labor Productivity And, as a Result