What does productivity measure in an economic context?

Productivity in an economic context is fundamentally defined as the measure of output produced per unit of input used. This concept is critical as it indicates how efficiently an economy or company transforms resources (like labor and capital) into goods and services. When productivity increases, it typically means that more output is being generated with the same or fewer inputs, which can lead to economic growth, higher wages, and improved living standards.

Understanding productivity helps in analyzing various economic health indicators. For instance, if productivity rises, firms can produce more without necessarily increasing costs, which can boost profit margins and stimulate investment. Conversely, stagnant or declining productivity can suggest problems in the economy, such as inefficiencies or a lack of innovation.

While other options like unemployment rates, price stability, and national debt are important economic indicators, they do not measure productivity directly. Instead, they reflect different aspects of economic performance and stability. Thus, the most accurate choice that directly addresses the measurement of productivity is output per unit of input.