Which of the following implies a decline in labor productivity in an economy?
A) a high rate of growth of capital formation
B) an improvement in input quality
C) a decrease in the production of goods and services
D) an increase in the budget surplus in the economy
E) a decrease in the prices of goods and services

Question

Quizplus · Accepted Answer

Labor productivity is a measure of the output of goods and services per unit of labor input. A decrease in the production of goods and services indicates that the output has decreased relative to the labor input, which implies a decline in labor productivity. A high rate of growth of capital formation (A) and an improvement in input quality (B) are likely to increase labor productivity. An increase in the budget surplus in the economy (D) and a decrease in the prices of goods and services (E) are not directly related to labor productivity.

Which of the Following Implies a Decline in Labor Productivity