ECONOMICS
PRODUCTIVITY
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
Productivity growth always results from capital investment
|
|
|
Labour productivity is the best measure of productivity growth
|
|
|
Productivity growth is measured by increases in the output of the economy
|
|
|
Productivity growth results from capital deepening
|
Detailed explanation-1: -An increase in capital per hour (or capital deepening) leads to an increase in labor productivity. For example, consider factory workers in a motor vehicle plant. If workers have increased access to machinery and tools to build vehicles, they can produce more vehicles in the same amount of time.
Detailed explanation-2: -Thus, the correct answer is ‘Primary productivity depends upon the plant species inhabiting a particular area. ‘
Detailed explanation-3: -Capital deepening is the change in the ratio of capital to labour4 multiplied by capital’s share of factor income. MFP, which is also known as total factor productivity, reflects the overall efficiency with which labour and capital inputs are used together in the production process.
Detailed explanation-4: -Capital deepening increases the marginal product of labor – i.e., it makes labor more productive (because there are now more units of capital per worker). Capital deepening typically increases output through technological improvements (such as a faster copier) that enable higher output per worker.