Final answer:
The correct answer is 'multifactor productivity,' which measures the efficiency of all inputs in the production process. It is crucial for sustained long-term economic growth and reflects an economy's ability to increase output with less input.
Step-by-step explanation:
The ratio of all resources to the goods and services produced is referred to as b. multifactor productivity. This measures the efficiency of all inputs used in production, including labor, capital, energy, material, and services, rather than just one single factor such as labor or capital alone. The concept of multifactor productivity (MFP) is used to assess the productivity of a nation or a business by calculating the output produced relative to the number of inputs used to produce that output.
Increases in multifactor productivity contribute to long-term economic growth as it reflects how efficiently an economy uses its resources. This efficiency is important because more productive economies are able to generate more output with the same or fewer inputs, which means that resources can be allocated to other uses or contribute to economic growth. A well-known aspect that influences productivity is economies of scale, which refers to the cost advantages industries obtain due to size, thus affecting labor productivity.