Which of the following would increase labor productivity,ceteris paribus?
A)An increase in the number of participants in the labor force.
B)An increase in the quality of capital.
C)Crowding out.
D)A decrease in the quantity of capital.

Question

Quizplus · Accepted Answer

An increase in the quality of capital, such as better equipment or more efficient technology, would allow workers to produce more output with the same amount of labor input, therefore increasing labor productivity. A, C, and D would not increase labor productivity, as A only increases the number of workers without necessarily improving their output, C refers to the decrease in private sector spending caused by an increase in government borrowing, and D decreases the amount of capital available for workers to use, which might even decrease productivity.

Which of the Following Would Increase Labor Productivity,ceteris Paribus