6. Productivity (Ch4-5)

Principles of Macroeconomics (with Xtra!)

Info icon This preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
P roductivity is a measure of how efficiently an economy transforms its labour, capital, and raw materials into goods and services. One common measure of an economy’s productivity is labour productivity, or the output per worker. This is not merely a measure of how hard people work but how “smart” they work. It is a measure of the extent to which Canadian businesses and industries take advantage of better education, training, management, equipment, and technology to increase the amount of production per worker. Productivity and the standard of living Labour productivity plays the dominant role in how fast the incomes of workers improve. Productivity growth allows real wages to increase by lowering prices, thus leading to real improvements to our standard of living. Increased productivity, which means reduced real costs to producers, is often confused with two other related but very different concepts: competitiveness, which means lower production costs than the competition, and
Image of page 1
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern