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In economics, Productivity is the amount of output created
(in terms of goods produced or services rendered) produced per unit input of used. For instance, "labor productivity" is
typically measured as output per worker or output per labor-hour. "Total factor productivity," sometimes called multifactor
productivity, also includes both labor and capital goods in the denominator (weighted by their incomes). Productivity studies
analyse technical processes and engineering relationships such as how much of an output that can be produced in a specified
period of time.
It is related to the concept of efficiency, which is the amount of
output produced relative to the amount of resources (time and money) that go into the production.
All else constant, it benefits a competitive business to improve productivity, which over time lowers private cost and
(hopefully) improves ability to compete and make profit. Increases in productivity also
influence society more broadly, by improving living standards, creating income, and generating economic growth.
Many economists attribute the economic expansion of the 1990s to the massive increase
in worker productivity that occurred during that period.
See also
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