Question

Notice that the distinction between nominal and real (or current dollar and constant dollar units) applies only to variables measured in dollars. An hour worked is an hour worked. There is no such thing as nominal hours worked This table measures output using dollars that have the purchasing power that a dollar had in 2005. The label "Real Output" tells you that the effects of inflation have indeed been removed from this measure. Calculate the missing values for labor productivity to the nearest whole number, and then use blue points (circle symbol) to plot labor productivity for all six years. The orange points (square symbol) show nominal output per hour worked for these same years, so you can see the difference a correction for inflation makes Real Output (Billions of 2005 dollars) 2,084 2,800 4,253 5,878 7,982 11,32 13,181 Labor (Billions of hours worked) 116 128 148 176 209 241 238 Labor Productivity (2005 dollars per hour worked) Year 1950 1960 1970 1980 1990 2000 2010 18 29 38 47 http://www.conference-board.org/data/economydatabase/ OUTPUT PER HOUR WORKED 70 Labor Productivity 60 50 e...pof up 6 17 f9 10 12 inye

Answer 1

Labor productivity is the rate of output per worker per unit of time.

Since labor productivity = output / labor hours

• So for 1960, labor productivity = real output / labor hours

Therefore labor productivity = ( 2800 / 128 ) = 21.875 or 22 approximately.

• Similarly, for 2010, labor productivity = ( 13181 / 238 ) = 55.38 or 55 approximately.

This is most probably a curve and not a line when we use some online application to graph it.