Paper 2 · June 2010 · National Income and Economic Growth
The construction industry contributes an average of 2.4% to Gross Domestic Product (GDP) but 4.5% to total formal employment. Which of the following best explains this difference?
AThe industry is capital intensive, employing few workers whose individual contribution to output is high in value.
BGovernment wage subsidies inflate the industry's employment figures without raising the value of output it produces.
CThe industry relies mainly on imported inputs, so a large share of its output is excluded from GDP calculations.
DThe industry is labour intensive, employing many workers whose individual contribution to output is relatively low in value.
Explanation
The construction industry contributes proportionally more to employment than to GDP because it is labour intensive: it employs a relatively large number of workers, but the value each worker adds to output is comparatively low, so the sector's employment share exceeds its share of the value of national output.
Derived from ZIMSEC Economics Paper 2, June 2010, Q1