The primary problem with productivity theory is that there is no commonly accepted method of determining labor's share of increases in productivity.

Question

Quizplus · Accepted Answer

While productivity theory provides useful insights into the relationship between output and inputs, it is difficult to determine how much of the gains in productivity should be allocated to labor. This is because productivity gains can result from a variety of factors, including improvements in technology, changes in management practices, and shifts in the composition of the workforce. As a result, economists and policymakers do not have a well-established method for measuring labor's contribution to productivity growth.

The Primary Problem with Productivity Theory Is That There Is