Suppose the aggregate production function is given by Y = AN. Given this information, we know that labour productivity is represented by:

Question

Quizplus · Accepted Answer

Labour productivity is often represented by the output per worker. Given the production function Y = AN, where Y is output, A is a productivity parameter, and N is the number of workers, dividing both sides by N gives Y/N = A. This shows that A represents output per worker, or labour productivity.

Suppose the Aggregate Production Function Is Given by Y =