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Math Help - Labor Productivity Question

  1. #1
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    Labor Productivity Question

    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
    Last edited by Hiccups; February 20th 2014 at 05:55 PM.
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    Re: Labor Productivity Question

    Quote Originally Posted by Hiccups View Post
    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.
    Last edited by romsek; February 20th 2014 at 06:22 PM.
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    Re: Labor Productivity Question

    Quote Originally Posted by romsek View Post
    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
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  4. #4
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    Re: Labor Productivity Question

    Quote Originally Posted by Hiccups View Post
    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.

    the formula should read

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