Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 16, Problem 5E
To determine
Suppose labor share
Calculate the annual growth rate of real GDP.
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There is a chart for quesition 2 that is attached as an image.
Suppose that work hours in New Zombie are 200 in year 1 and productivity is $8 per hour worked. What is New Zombie’s real GDP? If work hours increase to 210 in year 2 and productivity rises to $10 per hour, what is New Zombie’s rate of economic growth? Explain why sustained long-term economic growth comes from increases in labor productivity. Why do you think the trend rate of U.S. productivity growth has increased since the earlier 1973–1995 period?
Hint: The quantity of labor and increases in labor productivity are important sources of economic growth. Between 1953 and 2015, in the US economy the labor force increased from 63 million to 158 million workers. Productivity growth has usually been the more significant factor. To calculate real GDP in a given year you have to multiply hours worked by productivity.
2. Suppose that New Zombie has adopted the framework used by the US Bureau of Labor Statistics to calculate its…
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