US Productivity Rises at Fastest Rate in Three Years

EconEye Admin

3 years ago

Nonfarm labor productivity increased at a 4.7% annualized rate last quarter, the fastest since the third quarter of 2020, the Labor Department said.—reuters.com

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

What is labor productivity?

Labor productivity is __________.

a) the quantity of real GDP produced at full employment divided by the labor force

b) the quantity of real GDP produced by an hour of labor

c) 100 minus the unemployment rate

d) the price of labor per single unit of output

Wrong! - What does labor productivity measure? How is it calculated?

That's Right! - Labor productivity is the quantity of real GDP produced by an hour of labor.

Why might labor productivity have increased?

Labor productivity might have increased if _____________.

a) real GDP and aggregate hours both increased

b) the unemployment rate fell

c) the labor force increased

d) physical capital or human capital increased or technological advances

Wrong! - What events change labor productivity?

Well Done! - Labor productivity increases when physical capital or human capital increases or when technological advances.

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