chapter  1
4 Pages

Introduction

Productivity growth is vital to economic well-being or economic growth because it enhances standards of living as well as the quality of life. Productivity growth improves economic efficiency, meaning the ability of firms to produce more output at all levels of existing inputs. Economic efficiency leads to increases in income – personal, state, and national – that can then be used for additional consumption and for improvements in social conditions, such as reductions in relative poverty and environmental pollution and improvements in the quality of health care.