101 Attempts Do No Harm: /1 1. Background information with a news story Aa Aa Ch

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101 Attempts Do No Harm: /1 1. Background information with a news story Aa Aa Changes in productivity growth can have far-reaching effects in areas ranging from the government budget deficit to the conduct of monetary policy. But its most important effect is on standards of living. In the following problems, a few calculations with measures of output and hours worked show why. Growth in labor productivity translates into growth in total compensation for workers. Some additional calculations using the "rule of 70" show how large an effect a change of just a few percentage points can have if the faster growth rate persists for many years. These calculations reinforce the optimistic message at the time about prospects for higher living standards in the United States. They also suggest an important caution about the degree to which even a little inflation can distort simple measures of output or wages. Over time, seemingly small differences between real and nominal growth rates can have big effects on economic statistics. Read the article from The New York Times (January 26, 2011) in the scroll box below, and then answer the questions that follow. Even More Productive Than Americans David Leonhardt, The New York Times February 6, 2012

Explanation / Answer

The content stated in the article indicates tha United States is one of the most productive nation.

However, with respect to different measurements of productivity, Americans are the most productive in terms of output per employed person.

Hence, the correct answer is the option (1) [Output per employed person].

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