Question

US manufacturing output roughly doubled in the past twenty-five years, but that higher output is produced with 1/3 fewer workers. How much has productivity increased in US manufacturing over the past twenty-five years?

Answer 1

• Economic models help explain the Industrial Revolution, and why it started in Britain.
• Wages, the cost of machinery, and other prices all matter when people make economic decisions.
• In a capitalist economy, innovation creates temporary rewards for the innovator, which provide incentives for improvements in technology that reduce costs.
• These rewards are destroyed by competition once the innovation diffuses throughout the economy.
• Population, the productivity of labour, and living standards may interact to produce a vicious circle of economic stagnation.
• The permanent technological revolution associated with capitalism allowed some countries to make a transition to sustained growth in living standards.

so productivity increased in US manufacturing over the past twenty-five years= 2/3