Attempts: Keep the Highest: 13 3. Productivity and growth policies Consider a sm
ID: 1133630 • Letter: A
Question
Attempts: Keep the Highest: 13 3. Productivity and growth policies Consider a small island country whose only industry is weaving. The following table shows information about the small economy in two different years. Complete the table by calculating physical capital per worker as well as labor productivity. Hint: Recall that productivity is defined as the amount of goods and services a worker can produce per hour. In this problem, measure productivity as the quantity of goods per hour of labor Physical Capital (Looms) 40 120 Labor Force Workers) 20 40 Output (Garments) 6,000 12,600 Physical Capital per Worker (Looms) Labor Hours (Hours) 1,000 1,400 Labor Productivity (Garments per hour of labor) Year 2026 2027 Based on your calculations, in physical capital per worker from 2026 to 2027 is associated with productivity from 2026 to 2027 Suppose you're in charge of establishing economic policy for this small island country Which of the following policies would lead to greater productivity in the weaving industry? Check all that apply Subsidizing research and development into new weaving technologies Imposing a tax on looms Sharply increasing the interest rate on student loans to people pursuing advanced degrees in weaving Imposing restrictions on foreign ownership of domestic capitalExplanation / Answer
Physical capital per worker=Physical capital/labour force
Labour productivity=output/labour hours.
Increase,increase.
The following would lead to greater productivity in the weaving industry
-Subsidizing R and D into the weaving technology.
This would raise productivity by lowering the cost of production.
Year physical capital labour force Physical capital per worker labour hours output Labour productivity 2026 40 20 2 1000 6000 6 2027 120 40 3 1400 12600 9Related Questions
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