Understanding Productivity and Economic Growth

In the context of economic growth, productivity plays a crucial role in improving living standards and fostering long-term growth. Productivity is often defined as the efficiency with which inputs are converted into outputs. Different countries may experience varying rates of productivity growth due to several factors, including technology, human capital, and capital investment.

Consider the following statements regarding productivity:

1. Increasing returns to scale imply that as a firm increases its input, the output increases more than proportionately.

2. High levels of productivity are generally associated with advanced economies that have substantial investment in technology and education.

3. A decrease in productivity can arise from a decline in capital investments in a country, impacting long-term economic growth.

Based on these considerations, which of the following best describes a key feature of productivity in relation to economic growth?