Why does a change in GDP affect unit costs and the price level?
A) as GDP increases,productivity increases.
B) as GDP increases the price of non-labor inputs increases and the nominal wage tends to increase.
C) as GDP decreases,there are efficient gains
D) as GDP increases,economies of scale allow for lower unit costs.
E) as GDP increases the price of non-labor inputs decreases and the nominal wage tends to increase.

Question

Quizplus · Accepted Answer

As GDP increases, demand for inputs rises, leading to higher prices for non-labor inputs and upward pressure on nominal wages, which can increase unit costs and the price level.

Why Does a Change in GDP Affect Unit Costs and the Price