Productivity and Costs

In the first quarter of 2022, output in the manufacturing sector increased 5.7 percent, while work hours increased 5.1 percent.—bls.gov

Answer the following questions to check your understanding of the story.

What is the approximate change in labor productivity in the manufacturing sector in the first quarter of 2022?

Labor productivity _____________.

a) decreased by 0.6 percent

b) decreased by 0.9 percent

c) increased by 0.6 percent

d) increased by 1.1 percent

How would the model of the aggregate production function illustrate the information in the news clip?

a) The aggregate production function shifts downward, and a movement occurs rightward along the curve as labor hours increase.

b) Potential GDP doesn’t change, so the aggregate production function doesn’t shift, and there is no movement along the curve.

c) The aggregate production function does not shift, but a movement occurs up along the curve as labor hours increase.

d) The aggregate production function shifts upward, and a movement occurs along the curve as labor hours increase.

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