Ask Question
26 March, 12:12

If the labor force increases by 1.1 percent each year and productivity increases by 3.2 percent, how fast will output grow?

+5
Answers (1)
  1. 26 March, 12:25
    0
    4.3%

    The trick here isn't to multiply 1.1 by 3.2 which would give you a very incorrect value. The trick is to realize that last year you had 100% of the labor force and this year you have 101.1% of the labor force that you had last year. The same thing applies to productivity. You now have 103.2% of the productivity that you had last year. Now multiply those values. So: 1.011 * 1.032 = 1.043352

    Now we can subtract the 100% baseline of output we had last year giving us 0.043352 = 4.3352% growth in output, which when rounding to 1 decimal gives a output growth of 4.3%
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “If the labor force increases by 1.1 percent each year and productivity increases by 3.2 percent, how fast will output grow? ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers