3. Productivity and growth policies Consider a small island country whose only industry is weaving. The following table shows information about the small economy in two different years. Complete the table by calculating physical capital per worker as well as labor productivity. Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor. Labor Productivity Physical Capital Labor Force Physical Capital per Worker Labor Hours Output (Looms) (Garments per hour of labor) (Workers) (Looms) (Hours) (Garments) Year 2029 300 100 4,000 36,000 120 50,400 2030 480 4,200 in physical capital per worker from 2029 to 2030 is associated with in labor Based on your calculations, productivity from 2029 to 2030. Suppose you're in charge of establishing economic policy for this small island country. Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply. O Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts O Imposing restrictions on foreign ownership of domestic capital O Offering free public education to every worker in the country O Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving
3. Productivity and growth policies Consider a small island country whose only industry is weaving. The following table shows information about the small economy in two different years. Complete the table by calculating physical capital per worker as well as labor productivity. Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor. Labor Productivity Physical Capital Labor Force Physical Capital per Worker Labor Hours Output (Looms) (Garments per hour of labor) (Workers) (Looms) (Hours) (Garments) Year 2029 300 100 4,000 36,000 120 50,400 2030 480 4,200 in physical capital per worker from 2029 to 2030 is associated with in labor Based on your calculations, productivity from 2029 to 2030. Suppose you're in charge of establishing economic policy for this small island country. Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply. O Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts O Imposing restrictions on foreign ownership of domestic capital O Offering free public education to every worker in the country O Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving
Chapter19: Economic Development
Section: Chapter Questions
Problem 1.1P
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Transcribed Image Text:3. Productivity and growth policies
Consider a small island country whose only industry is weaving. The following table shows information about the small economy in two different years.
Complete the table by calculating physical capital per worker as well as labor productivity.
Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as
the quantity of goods per hour of labor.
Labor Productivity
Physical Capital
Labor Force
Physical Capital per Worker
Labor Hours
Output
(Looms)
(Garments per hour of labor)
(Workers)
(Looms)
(Hours)
(Garments)
Year
2029
300
100
4,000
36,000
120
50,400
2030
480
4,200
in physical capital per worker from 2029 to 2030 is associated with
in labor
Based on your calculations,
productivity from 2029 to 2030.
Suppose you're in charge of establishing economic policy for this small island country.
Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply.
O Encouraging saving by allowing workers to set aside a portion of their earnings in tax-free retirement accounts
O Imposing restrictions on foreign ownership of domestic capital
O Offering free public education to every worker in the country
O Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving
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