In general,productivity is a measure of
A)the economy's ability to increase real GDP per capita.
B)the amount of output that the economy produces per unit of input.
C)real GDP as a function of total employment.
D)the total amount of output that the economy is capable of producing.
E)potential output.

Question

Quizplus · Accepted Answer

Productivity measures the amount of output (goods and services) that is produced per unit of input (such as labor and capital). It is a measure of how efficiently resources are being used in the production process, and is often used as an indicator of economic growth and prosperity. Real GDP per capita (choice A) is one measurement of economic growth, but productivity is a more direct measure of the efficiency of the production process. Real GDP as a function of total employment (choice C) is not a measure of productivity but rather of labor productivity, which is only one component of overall productivity. The total amount of output that the economy is capable of producing (choice D) is known as potential output, which is not the same as actual productivity. Choice E (potential output) is incorrect for the same reason as choice D.

In General,productivity Is a Measure of