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If average labour productivity decreases, real GDP per person:Group of answer choicesremains constantincreasesmay increase or decrease, depending on the change in the share of population employeddecreases

Question

If average labour productivity decreases, real GDP per person:Group of answer choicesremains constantincreasesmay increase or decrease, depending on the change in the share of population employeddecreases

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Solution

If average labor productivity decreases, real GDP per person typically decreases. Here's why:

  1. Labor productivity is defined as the amount of goods and services that a worker produces in a given amount of time. It's a measure of economic performance.

  2. GDP (Gross Domestic Product) per person is a measure of the average economic output per person in a certain geographical area. It's calculated by dividing the total GDP by the total population.

  3. If labor productivity decreases, it means that workers are producing less goods and services in the same amount of time. This could be due to a variety of factors, such as less efficient technology, lower skill levels, or unfavorable economic conditions.

  4. When workers produce less, the total economic output (GDP) also decreases. Since GDP per person is calculated by dividing the total GDP by the population, a decrease in GDP would also lead to a decrease in GDP per person.

  5. Therefore, if average labor productivity decreases, real GDP per person also decreases.

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