Some economists argue that the productivity slowdown of the mid-1970s to the mid-1990s was due to changes in oil prices that
A)increased production costs, causing firms to reorganize production to conserve energy, which reduced output per worker.
B)decreased production costs, causing firms to reorganize production to conserve energy, which reduced output per worker.
C)increased production costs, causing firms to reorganize production to conserve energy, which increased output per worker.
D)decreased production costs, causing firms to increase production, which reduced output per worker.
E)increased participation in the labour force by people who would not have participated in the past.

Question

Quizplus · Accepted Answer

The increase in oil prices led to higher production costs for firms, which incentivized them to reorganize production to conserve energy. This reorganization likely involved reducing output per worker, which contributed to the productivity slowdown during this period.

Some Economists Argue That the Productivity Slowdown of the Mid-1970s