ECONOMICS
PRODUCTIVITY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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an increase in capital investment
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an increase in income tax rates
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an increase in the demand for the industry’s product
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an increase in the number of firms in the industry
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Detailed explanation-1: -Labor productivity is largely driven by investment in capital, technological progress, and human capital development. Business and government can increase labor productivity of workers by direct investing in or creating incentives for increases in technology and human or physical capital.
Detailed explanation-2: -An increase in physical productivity causes a corresponding increase in the value of labor, which raises wages. That is why employers look for education and on-the-job training. Knowledge and experience increase the human capital of the workers and make them more productive.
Detailed explanation-3: -Sources of Productivity Growth Growth in output per hour of labor can be achieved through three different sources: improvements in the quality of workers (i.e., human capital), increases in the level of physical capital, and technological progress.
Detailed explanation-4: -Key Takeaways For any period of time, the level of labor productivity is determined by two broad factors: capital equipment and applied technical efficiency.