An article in the Economist observed that "people of all ages would gain from policies that boosted growth and productivity."
Source: "Slower Growth in Ageing Economies Is Not Inevitable," Economist, March 28, 2019.
a. What do people gain when the economy experiences growth and improved productivity?
O A. Real wages increase when workers produce more output per hour.
O B. In general, increased productivity and economic growth are the key to rising living standards.
C. Workers receive higher real wages that allow them to buy more of the goods and services that firms produce.
D. Only A and B are correct.
O E. All of the above are correct.
b. Does increasing productivity automatically increase growth? Briefly explain.
O A. No, accumulating more inputs—such as labor, capital, and natural resources is the key to automatically increasing growth.
B. No, this assumption only holds true for high-income countries like the United States.
C. Yes, increasing productivity should automatically increase growth as measured by nominal GDP.