Productivity
Productivity measures output produced per unit of input (labour, capital). Labour productivity (output per worker) is most commonly measured. Productivity growth is essential for sustained wage growth and competitiveness.
Real World
Germany's labour productivity is about 30% higher than the UK's, partly because German firms invest heavily in apprenticeships and automation — a BMW worker produces significantly more output per hour than equivalent UK manufacturing workers.
Exam Focus
When discussing productivity, always specify which type (labour or capital) and link improvements to specific supply-side policies.
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