ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Time is not a measure of productivity.

Detailed explanation-2: -To measure labor productivity we prefer to compare the number of hours worked to the output produced during that time. Some countries, including the United States, collect data on hours worked, making it possible to measure output per hour worked.

Detailed explanation-3: -Measuring productivity can warp incentives, especially if not measured well. Sloppy inferences from measurements could result in worse management decisions rather than better ones.

Detailed explanation-4: -Productivity is commonly defined as a ratio between the output volume and the volume of inputs. In other words, it measures how efficiently production inputs, such as labour and capital, are being used in an economy to produce a given level of output.