The service sector has lower productivity improvements than the manufacturing sector because
A) the service sector uses less skilled labor than manufacturing
B) the quality of output is lower in services than manufacturing
C) services usually are labor-intensive
D) service sector productivity is hard to measure
E) none of the above

Question

Quizplus · Accepted Answer

The service sector tends to be labor-intensive, meaning that productivity improvements are more difficult to achieve since increasing output usually requires hiring more workers. In contrast, manufacturing can increase productivity by adopting new technologies and improving processes, leading to greater output per worker.

The Service Sector Has Lower Productivity Improvements Than the Manufacturing