Question

What is meant by productivity? explain approaches to measure it?

Answer 1

Productivity describes various measures of the efficiency of production. A productivity measure is expressed as the ratio of output to inputs used in a production process, that is output per unit of input.

factors to measure :

• multifactor productivity (MFP), which measures the
growth in value added output (real gross output less
intermediate inputs) per unit of labour and capital
input used; and
• labour productivity (LP), which measures the growth
in value added output per unit of labour used.