- #1
luis20
- 50
- 0
I found on the internet that there are 2 main multifactor productivity measures:
1) total output / (labour + capital + intermediate inputs)
2) value added / (labour + capital)
, where value added = total output - intermediate inputsThis two measures make sense but my teacher said that if we want total productivity and use value added we should do:
value added / (labour + capital + intermediate inputs)
This measure makes no sense to me, since intermediate inputs do not produce value added.
What do you think?
1) total output / (labour + capital + intermediate inputs)
2) value added / (labour + capital)
, where value added = total output - intermediate inputsThis two measures make sense but my teacher said that if we want total productivity and use value added we should do:
value added / (labour + capital + intermediate inputs)
This measure makes no sense to me, since intermediate inputs do not produce value added.
What do you think?