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2 August, 09:18

Outline two reasons why the production of goods in an economy might rise, while productivity in the economy falls at the same time.

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  1. 2 August, 09:47
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    You can make the widgets your factory is capable of manufacturing, but if you cannot get anything in exchange for your widgets, then you production is rising while productivity is falling. That is, the productivity isn't gaining anything useful.

    Another thing that could happen is that more labor is employed (so production increases), but productivity may not increase because the average number widgets produced has decreased.

    Normally the problem is not making something. Usually the problem is selling it.
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