Answer: Country 1

## Explanation **Country 1 (Option A)** has the highest GDP growth potential based on the labor productivity growth accounting equation: **Growth Accounting Equation:** GDP Growth = Growth in Labor Force + Growth in Labor Productivity **Calculations:** - **Country 1:** -2.0% + 3.0% = **1.0%** - **Country 2:** -1.0% + 1.0% = **0.0%** - **Country 3:** -0.5% + 2.0% = **1.5%** Wait, let me recalculate: - **Country 1:** -2.0% + 3.0% = **1.0%** - **Country 2:** -1.0% + 1.0% = **0.0%** - **Country 3:** -0.5% + 2.0% = **1.5%** Actually, Country 3 has the highest GDP growth potential at 1.5%. Let me double-check the question... Looking at the data again: - Country 1: Labor force growth = -2.0%, Labor productivity growth = +3.0% - Country 2: Labor force growth = -1.0%, Labor productivity growth = +1.0% - Country 3: Labor force growth = -0.5%, Labor productivity growth = +2.0% **Correct calculations:** - Country 1: -2.0% + 3.0% = **1.0%** - Country 2: -1.0% + 1.0% = **0.0%** - Country 3: -0.5% + 2.0% = **1.5%** **Country 3 has the highest GDP growth potential at 1.5%.** The correct answer should be **C**. **Correction:** The answer is **C. Country 3** with 1.5% GDP growth potential.

Author: LeetQuiz Editorial Team