Question

Using examples, describe the U.S. economy in terms of the significance of the service sector.    Describe briefly the measures of productivity. What are the major challenges in improving productivity in general and in services, in particular? What are the typical measures of productivity in services and why is important that we improve productivity in services.  

Answer 1

Part a and b : The services sector is an important part of the U.S. economy. According to BEA, in 2009 services accounted for 79.6 percent of U.S. private-sector GDP or $9.81 trillion. Services jobs accounted for more than 80 percent of U.S. private-sector employment, or 89.7 million jobs.

Lets try to define measures of productivity by an example. Labour productivity is the amount of output per worker. The productivity of a factory worker making footballs, for example, could be measured by how many footballs they make in one hour. The more they produce, the more they contribute to profits for the company.