Question

Suppose that an economy's labor productivity and total worker-hours each grew by 4 percent between year 1 and year 2. We could conclude that this economy's:

Answer 1

Answer:

c. production possibilities curve shifted outward

Explanation:

As we know that

Labor productivity = total output ÷ worker per hours

Percentage change in total output is

= Percentage change in labor productivity + Percentage change in worker - hours

So

The change in total output is

= 4 + 4

= 8

In whole the real GDP would be rise by 8%

It can be seen that the labor productivity and the workers would be grow this represent the production possibility curve would be shiftward to the outside direction in the case when more of the both goods would be produced or generated