Suppose labor productivity in the United States was

$110,000 per worker in 2015. Calculate the value of labor productivity in the year 2035 (20 years later) if: (LO1)

a. Productivity continues to grow by 2.6 percent per year.

b. Productivity growth falls to 2 percent per year, its average rate during the period 1970–2009. (Note:

You do not need to know the actual values of average labor productivity in any year to solve this problem.)

c. How much larger would labor productivity per worker be in 2035 with the higher growth rate as compared to the lower growth rate?