Productivity

• What are the reasons for low productivity?

  1. Low rate of capital investment
  2. Skill shortages
  3. Low levels of competition
  4. Low aggregate demand and high spare capacity
  5. Banking crisis leading to less lending
  6. Slowing rates of innovation
• What are the factors effecting productivity?

  1. Investment
  2. Labour supply
  3. Research
  4. Innovation
  5. Enterprise
• What are the advantages of high productivity?

  1. Lower unit costs
  2. Improved competition
  3. Higher profits
  4. Higher wages
  5. Economic growth