Question

an article in the wall street journal notes that
aising productivity in the long run is the most effective way to elevate standards of living.\ source: greg ip, \politicians should pay heed to productivity problem,\ wall street journal, july 22, 2015. the claim of this article is a. faulty because it assumes that the same factors influence economies everywhere. b. consistent with economic theory that explains that long - run economic growth is dependent on increases in real gdp per capita. c. consistent with economic theory that explains that short - run economic growth is dependent on increases in real gdp per capita. d. faulty because it assumes that productivity and standards of living are related.

Explanation:

Economic theory shows that long - run economic growth is closely tied to increases in real GDP per capita. Productivity growth leads to more output per worker. Over the long run, this increase in output (as measured by real GDP per capita) is what elevates the standard of living. For example, when workers can produce more goods and services per hour (higher productivity), the economy's total output (real GDP) increases. If the population grows at a slower rate than the increase in real GDP, real GDP per capita rises, which means more goods and services are available per person, improving the standard of living.

• Option A: There is no indication in the claim about assuming the same factors influence all economies. The claim is about the relationship between productivity and standard of living in general, not about cross - economy factor assumptions.
• Option C: The claim is about the long run, not the short run. Short - run economic growth can be influenced by many factors like aggregate demand fluctuations, but the article specifically mentions the long - run effect of productivity on the standard of living.
• Option D: Productivity and standard of living are indeed related. Higher productivity (in the long run) leads to higher real GDP per capita (a measure related to standard of living). So the assumption in the claim is correct, not faulty.

Answer:

B. consistent with economic theory that explains that long - run economic growth is dependent on increases in real GDP per capita.