Suppose both total employment and total output always grew by 2 percent each year.What would be the annual growth in labour productivity in an economy over a decade?
A) 0 percent
B) 2 percent
C) 10 percent
D) 20 percent

Question

Suppose both total employment and total output always grew by 2 percent each year.What would be the annual growth in labour productivity in an economy over a decade?  
A) 0 percent 
B) 2 percent 
C) 10 percent 
D) 20 percent

Quizplus · Accepted Answer

Labour productivity is calculated as output per worker. If both total employment and total output grow by 2 percent annually, the output per worker remains constant, resulting in 0 percent growth in labour productivity.

Suppose Both Total Employment and Total Output Always Grew by 2