The change reflected in the above figure might be a result of
A)a fall in the price level.
B)an increase in the quantity of labour.
C)a decrease in the money prices of resources other than labour.
D)a decrease in the quantity of capital.
E)a rise in the money wage rate.

Question

The change reflected in the above figure might be a result of
A)a fall in the price level. 
B)an increase in the quantity of labour. 
C)a decrease in the money prices of resources other than labour. 
D)a decrease in the quantity of capital. 
E)a rise in the money wage rate.

Quizplus · Accepted Answer

The figure shows an increase in the unit labor cost, which is calculated by dividing the money wage rate by labor productivity. Therefore, the change is likely caused by a rise in the money wage rate.

The Change Reflected in the Above Figure Might Be a Result