Labor productivity can best be calculated as
A) real Gross Domestic Product (GDP) / Gross Domestic Product (GDP) price index.
B) real Gross Domestic Product (GDP) / number of workers.
C) number of workers / hours of work.
D) real wages / hours of work.

Question

Quizplus · Accepted Answer

Labor productivity is a measure of the amount of goods and services that a worker produces in a given period of time. Therefore, the best way to calculate labor productivity is by dividing real GDP (which measures the value of goods and services produced in a country) by the number of workers (which measures the amount of labor input). Dividing real wages by hours of work (D) would give us a measure of labor compensation per hour, and dividing the number of workers by hours of work (C) would give us a measure of labor utilization.

Labor Productivity Can Best Be Calculated as