ECO 421LEC Lecture 4: TOPIC 4 p2
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Consider the table below-containing data for two nations, Alfa and Beta, for the years 1995 and 2015.
1995 | 2015 | |||
Country | Average labor productivity | Output per person | Average labor productivity | Output per person |
Alfa | $42,770 | $14,114 | $39,773 | $20,661 |
Beta | $27,975 | $13,428 | $44,765 | $21,935 |
a. Which of the following statements are true for nations Alfa and Beta:
Labor productivity increased in both nations. | |
Labor productivity decreased in both nations. | |
Living standards increased in both nations. | |
Living standards increased in Beta but not an Alfa. |
b. Is it possible for average living standards to rise during a period in which average labor productivity is falling?
No, because average living standards only increase because of increased labor productivity. | |
Yes, if the output per person is falling less than labor productivity. | |
No, because average living standards are measured as output per worker. | |
Yes, if the nation experiences increased employment relative to population. |