Question

4. Say that the average worker in Canada has productivity of $33 per hour while the average worker
in the United Kingdom has productivity of $29 per hour (both measured in U.S. dollars). Over the
next six years, say that worker productivity in Canada grows at 1% per year while worker
productivity in the UK grows 3% per year. At that point, who will have the higher productivity
level, and by how much?

Answer 1

=>current productivity of an average worker in Canada is $33 per hour. Worker productivity in Canada grows at 1% per year. so After six years productivity of an average worker in Canada will be:-

= $33 (1.01)^6

= $33 (1.061)

= $35.03 / per hour

=> Current productivity of an average worker in UK is $29 per hour. Worker productivity in Canada grows at 3% per year. so After six years productivity of an average worker in Canada will be:-

= $29 ( 1.03)^6

= $29 (1.194)

= $34.63/ per hour

=> so Canada workers are have higher productivity level by ($35.03-$34.63) = $0.40 per hour.