Question

What role does productivity play in raising standards of living?

Answer 1

Productivity is a measure of the efficiency of production. It is a ratio of actual output (production) to what is required to produce it Increased productivity means greater output from the same amount of input.

Labor productivity is a measure of the amount of goods and services that the average worker produces in an hour of work.

The level of productivity is the single most important determinant of a country’s standard of living, with faster productivity growth leading to an increasingly better standard of living.

The increased productivity increases the power of an economy through driving economic growth and satisfying more human needs with the same resources.This affects the standards of living rising.