ECON: MACRO4
4th Edition
ISBN: 9781305436862
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 8, Problem 2.5PA
To determine
− The production per hour after 100 years from the labor productivity growth rates.
Concept introduction
Labor productivity - It refers to the efficiency of labor in producing goods and services. It is calculated as the number of goods/services produced by a unit of labor in a day or specified period of time. The labor productivity equation is labor output/ labor input.
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Students have asked these similar questions
6)
There is such a close relationship between changes in a nation’s rate of productivity growth and changes in its average real hourly wage because if the average real hourly wage and output per worker is
increasing, then the amount of output available per capita for workers to buy will be growing so more can be purchased.
decreasing, then the amount of output available per capita for workers to buy will be less so more can be purchased.
increasing, then the amount of output available per capita for workers to buy will be less so more can be purchased.
decreasing, then the amount of output available per capita for workers to buy will be decreasing so more can be purchased.
Suppose that two nations start out in 2007 with identical levels of output per work hour-say, $100 per hour. In the first nation, labor productivity grows by 1 percent per year. In the second, it grows by 2 percent per year. Use a calculator or a spreadsheet to determine how much output per hour each nation will be producing 20 years later, assuming that labor productivity growth rates do not change. Then, determine how much each will be producing per hour 100 years later. What do your results tell you about the effects of small differences in productivity growth rates?
11. The table below shows the average income per person in two countries in 1900 and their
subsequent growth rates.
Country
Argentina
Growth rate from 1900 to 2010
Income per person in 1900
$2756
$2758
1.03%
Canada
2.19%
The growth rates are only slightly different so maybe we should expect that they end up with similar,
but not identical final incomes but they didn't. What was the absolute value of the difference in their
incomes per person in 2010?
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