From 1987 to 1997, labour productivity fell at an annual average rate of 0.3 percent in small firms and rose by 1.3 percent in large corporations. Between 1997 and 2005, labour productivity increased 3.2 percent per year in small firms and by 1.5 percent per year in large corporations.
Explain how the productivity trends described in the news clip would change real GDP and employment. Draw a graph similar to Fig. 22.8 to illustrate your answer.