2009 2010 Population 400,000 412,000 Number of hours worked 800,000,000 800,000,000 Real GDP ($) 12,000,000,000 12,236,400,000 Labor productivity is equal to real GDP divided by the number of hours worked (thus, the unit of measurement is dollars per hour). What was the growth rate of labor productivity in this economy between 2009 and 2010? How would I determine the growth rate? Would it be 1.93%? (15.2955-15)/15 2. ## Re: Labor Productivity Question Originally Posted by Hiccups  2009 2010 Population 400,000 412,000 Number of hours worked 800,000,000 800,000,000 Real GDP ($) 12,000,000,000 12,236,400,000

Labor productivity is equal to real GDP divided by the number of hours worked (thus, the unit of measurement is dollars per hour). What was the growth rate of labor productivity in this economy between 2009 and 2010?

How would I determine the growth rate? Would it be 1.93%? (15.2955-15)/15
First thing you have to do is calculate the Labor productivity for 2009 and 2010 from the data provided.

$$LP_{year}=\frac{GDP_{year}}{hours.worked_{year}}$$

The growth rate is then simply

$$R=\frac{LP_{2010}}{LP_{2009}}-1$$

Times 100 if you want it in per cent.

3. ## Re: Labor Productivity Question

Originally Posted by romsek
First thing you have to do is calculate the Labor productivity for 2009 and 2010 from the data provided.

$$LP_{year}=\frac{GDP_{year}}{hours.worked_{year}}$$

The growth rate is then simply

$$R=\frac{LP_{2010}}{LP_{2009}}$$

Times 100 if you want it in per cent.
Hmm.. When I find the LP of each year and divide them, I get 101.97% which I do not believe is right. Am I doing something wrong?

LP 2009: 15
LP 2010: 15.2955
(15.2955 / 15) = 1.0197

4. ## Re: Labor Productivity Question

Originally Posted by Hiccups
Hmm.. When I find the LP of each year and divide them, I get 101.97% which I do not believe is right. Am I doing something wrong?

LP 2009: 15
LP 2010: 15.2955
(15.2955 / 15) = 1.0197
No it's my error.

$$R=\frac{LP_{2010}}{LP_{2009}}-1$$