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Productivity measures:

A) real output per unit of input.
B) per unit production costs.
C) the changes in real wealth caused by price level changes.
D) the amount of capital goods used per worker.

User Aquarelle
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1 Answer

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Final answer:

Productivity is defined as the output produced per unit of input, typically expressed as GDP per worker or per hour worked. It is a critical factor for an economy's long-term growth and higher wages. The correct measure of productivity is real output per unit of input, making the answer A) the most accurate.

Step-by-step explanation:

Understanding Productivity

Productivity refers to the value of output produced per worker or per hour worked. It is often measured by the level of GDP per worker (input) or GDP per hour. Productivity is vital because it is the primary determinant of an economy's rate of long-term economic growth and higher wages. Significant factors that influence productivity growth include human capital, physical capital, and technology. An aggregate production function shows how these inputs lead to the output measured as GDP per capita, reflecting the productivity of the economy.

In response to the student's question, the correct answer is A) real output per unit of input. Productivity measures the efficiency with which inputs are converted into outputs, not just the costs or the capital used.

User Geek
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