Which of the following could be used to measure the efficiency of labour?

Step 1: Analyze the question The question asks which measure shows how efficient labour is. Efficiency means how well inputs (here, labour) are turned into output.

Step 2: Explain the concept Labour efficiency is closely linked to labour productivity:

Labour productivity = Total output ÷ Number of workers (or labour hours)

This is an input-output relationship. If workers produce more output with the same labour input, they are more efficient.

Step 3: Check each option

• A. Rate of inflation: This measures the general rise in prices over time. It says nothing about how well workers produce.
• B. Input-output ratio: This compares what goes into production (labour) with what comes out (goods and services). It directly measures how efficiently labour is used. ✔
• C. Buying more machines: This is a way of increasing capital, not a measure of anything. It may raise productivity, but it does not measure labour efficiency.
• D. Unemployment rate: This shows the share of the labour force without jobs. It measures a labour market condition, not the efficiency of those working.

Step 4: Answer The correct option is B. input-output ratio.

Exam tip: When you see "efficiency" or "productivity" in Economics, think output per unit of input. Options about prices (inflation) or joblessness (unemployment) are usually distractors. Also remember the difference between measuring something (a ratio or index) and improving it (such as buying machines or training workers).