GENERAL KNOWLEDGE

Detailed explanation-1: -Productivity increases when more output is produced with the same amount of inputs or when the same amount of output is produced with less inputs. There are two widely used productivity concepts. Labour productivity is defined as output per worker or per hour worked.

Detailed explanation-2: -As an economy’s labor productivity grows, it produces more goods and services for the same amount of relative work. This increase in output makes it possible to consume more of the goods and services for an increasingly reasonable price.

Detailed explanation-3: -If you use fewer resources to achieve more output, you will typically have high productivity. Profitability is the revenue left over after all expenses and taxes have been paid. You can increase your profitability by producing more products while paying less for the resources needed to produce and sell them.

Detailed explanation-4: -Even with rising output, productivity may decrease, as illustrated by trends in Industry C. Both output and hours worked increased, but hours worked increased more relative to output. Therefore, labor productivity fell.