Over the last ten years productivity grew faster in Oceania than in Freedonia and the population and total hours worked remained the same in both countries. It follows that
A)real GDP per person must be higher in Oceania than in Freedonia.
B)real GDP per person grew faster in Oceania than in Freedonia.
C)the standard of living must be higher in Oceania than in Freedonia.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

Productivity is a measure of output per hour worked. If productivity grew faster in Oceania than in Freedonia over the last ten years, it means that Oceania produced more goods and services per hour worked than Freedonia. This implies that real GDP per person also grew faster in Oceania. However, we cannot say for sure that real GDP per person is higher in Oceania than in Freedonia without more information. The standard of living also depends on other factors such as income distribution, social services, and environmental quality. Therefore, choice C is not necessarily correct. Choice D is also not necessarily correct because we have only confirmed one statement, not all three.

Over the Last Ten Years Productivity Grew Faster in Oceania