What would happen to the Unemployment rate if GDP grew only as fast as average labor productivity?

Answer 1

If GDP is growing at the same rate as labour productivity, then employment is constant. eg if you have the same number of people employed and they become 1% more productive, then GDP grows by 1%.

Since the unemployment rate is unemployed /labour force = 1-(employed/labour force):

If labour force is increasing (eg due to population growth): URate goes up
If labour force is constant: URate is constant
If labour force is falling (falling population or falling participation rate): URate falls

Answer 2

Don't know what i have been doing, or more likely, what the other people answering this question have been doing.

GDP = value of goods produced. its a dollar value

GDP can grow through inflation (if you are not talking about real GDP) so unemployment could go up because of the effects of inflation - more costs less demand. As long as the inflation effects outweighed the rise in productivity...

GDP could grow due to more goods being producted at a lower cost because the labour force is more productive - more employment, less unemployment more jobs

Answer 3

Unemployment would stay the same, because the same pool of labor would be able to produce the new amount of GDP without adding inflation.

Answer 4

Unemployment will still grow since GDP did not grow due to no increase in output. meaning no new business coming in thus no hiring of new employees, there must be new investment to boost the labor needs

Answer 5

gdp=productivity x number of workers l
unemployment = labor force - number of workers
= labor force - gdp/productivity
So you need to know whether or not the labor force is changing