When comparing productivity measures over time,changes in the process or in the rate of inflation may cause the comparison to be misleading.

Question

Quizplus · Accepted Answer

This statement is true. Changes in the process or inflation can significantly impact productivity measures, causing them to be misleading if not taken into consideration. For example, if a company changes its production process to become more efficient, productivity measures would increase even if the actual output remains the same. Similarly, inflation can affect the cost of inputs, making output appear more costly even if there has been no change in the production process. Therefore, it is essential to account for such changes when comparing productivity measures over time.

When Comparing Productivity Measures Over Time,changes in the Process or in the Rate