GDP equals hours of work multiplied by output per hour.This can be rewritten as
A)growth rate of potential GDP = growth rate of labor input + growth rate of labor productivity.
B)potential GDP = wages + cost of production.
C)growth rate of real GDP = growth rate of labor input + growth rate of marginal output.
D)growth rate of GDP = growth rate of wages + growth rate of labor productivity.

Question

Quizplus · Accepted Answer

The growth rate of potential GDP is determined by the growth rate of labor input (how much labor is available/used) and the growth rate of labor productivity (how much output each hour of labor produces). This reflects the relationship between total output (GDP), the amount of labor used, and the efficiency of that labor.

GDP Equals Hours of Work Multiplied by Output Per Hour