📚 Learning Guide
Labor Productivity and Decision-Making
hard

How does the adoption of new technology influence labor productivity, and what is its subsequent effect on GDP and labor force participation?

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Choose the Best Answer

A

Increased technology leads to lower productivity and GDP, reducing labor force participation.

B

Technology adoption improves productivity, boosting GDP and encouraging higher labor force participation.

C

Technology has no impact on productivity, GDP, or labor force participation.

D

Decreased technology adoption results in higher productivity and GDP, increasing labor force participation.

Understanding the Answer

Let's break down why this is correct

Answer

The adoption of new technology can significantly boost labor productivity, which means workers can produce more goods or services in the same amount of time. For example, if a factory uses robots to assemble products, the robots can work faster and with fewer mistakes than humans, allowing the factory to produce more items each hour. As productivity increases, businesses can make more money, which contributes to a higher Gross Domestic Product (GDP), the total value of all goods and services produced in a country. Additionally, as companies grow and become more profitable, they may hire more workers, leading to greater labor force participation. Overall, new technology can create a cycle of growth where better tools help workers do their jobs more efficiently, benefiting the economy as a whole.

Detailed Explanation

When new technology is used, workers can do their jobs faster and better. Other options are incorrect because This answer suggests that technology makes things worse, which is not true; This answer believes technology has no effect, but that's incorrect.

Key Concepts

technology adoption
GDP (Gross Domestic Product)
labor force participation
Topic

Labor Productivity and Decision-Making

Difficulty

hard level question

Cognitive Level

understand

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