Answer to Question #104533 in Macroeconomics for Bokamoso

Question

What does productivity mean

Answer 1

In economics, productivity refers to the ratio between volume of outputs and the inputs volume. That is, the ratio of what is produce to what is needed to produce it. It measures the efficiency of production inputs such as capital, and labor used in an economy to produce certain level of output.

It is considered as a key source of competitiveness in an economy as well as economic growth. In many international comparisons and performance assessments of countries, productivity is used as a basis for statistical information.