HomeQuestionsEconomicsLabor Productivity and Decision-Making
📚 Learning Guide
Labor Productivity and Decision-Making
medium

How does an increase in output per labor hour typically affect a country's GDP?

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

It decreases GDP

B

It has no effect on GDP

C

It increases GDP

D

It causes GDP to fluctuate unpredictably

Understanding the Answer

Let's break down why this is correct

Answer

When workers produce more goods or services in each hour they work, this is called an increase in labor productivity. Higher productivity means that the same number of workers can create more value, which contributes positively to a country's overall economic output, known as GDP. For example, if a factory produces 100 toys in an hour instead of 80, the increased production boosts the factory's contribution to GDP. As productivity rises, businesses can also invest more in their operations, potentially leading to more jobs and higher wages. Therefore, an increase in output per labor hour generally leads to a stronger economy and higher GDP.

Detailed Explanation

When workers produce more in each hour, the total value of goods and services goes up. Other options are incorrect because Some might think that more output could hurt GDP; It's a common mistake to think that output doesn't change GDP.

Key Concepts

output per labor hour
GDP (Gross Domestic Product)
Topic

Labor Productivity and Decision-Making

Difficulty

medium level question

Cognitive Level

understand

Ready to Master More Topics?

Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.

Start Learning with SeekhExplore More Labor Productivity and Decision-Making Questions