How does productivity explain the differences in standard of living across countries?
A)Productivity tends to be lower in countries with high population; therefore in those countries standards of living are lower.
B)Productivity explains very little of the differences across countries in the standard of living.
C)Productivity explains some, but not most, of the differences across countries in the standard of living.
D)Productivity explains most of the differences across countries in the standard of living.

Question

Quizplus · Accepted Answer

Productivity, measured as output per worker, is a significant factor in determining a country's standard of living. Higher productivity leads to higher incomes, which can then be used for consumption, investment, and savings. Countries with high productivity are typically able to produce more goods and services at a lower cost, making them more competitive in the global market. This results in higher economic growth, which in turn raises the standard of living.

How Does Productivity Explain the Differences in Standard of Living