A Nation's Technological Gains Have Increased Labor Productivity And, as a Result

question 16

Multiple Choice

A nation's technological gains have increased labor productivity and, as a result, the average number of hours worked each week has been falling. How do Gross Domestic Product (GDP) calculations account for this shortening of the average workweek?

• A) Real Gross Domestic Product (GDP) does not factor in an increase in leisure time but per capita real Gross Domestic Product (GDP) does.
• B) Neither real Gross Domestic Product (GDP) nor per capita real Gross Domestic Product (GDP) includes the increase in leisure time that results, so the nation's actual economic growth will be overstated.
• C) Gains in leisure time are dollar-valued and included in real per capita Gross Domestic Product (GDP) gains.
• D) Gains in leisure time are not included in Gross Domestic Product (GDP), so any increase in real per capita Gross Domestic Product (GDP) will understate the nation's actual economic growth.

---

Definitions:

Leather Jackets

Garments made from the skin of animals, primarily cows, processed and designed for wear primarily as outerwear.

Utility Function

A mathematical representation of a consumer's preference ranking for bundles of goods or services, used to predict economic behavior.

Curds

The solid parts of milk that coagulate when milk is soured or treated with enzymes, used in cheese-making.

Whey

A liquid by-product of cheese production, rich in proteins and lactose, commonly used as a dietary supplement and in various food products.