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Productivity
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Productivity The amount of output (goods and services) produced per unit of input (productive resources) used.
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Human Capital Investment
Investment of time, effort and resources in education and training--to increase one's own knowledge, skills, health, etc., or to develop those assets in others.
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Physical Capital Investment
Investment in an asset used in production that is made by humans, but is non-human.
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Productivity goes up whenever more can be produced with the same amount of resources.
Investment in human and physical capital increases productivity.
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Human Capital Example If a company produces 5,000 pencils in an hour, and it produced 5,100 in the next hour with the same amount of labor productivity went up.
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Physical Capital Example
If a company purchased a new machine which allowed them to produce 200 more units per day productivity went up.
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