An increase in the productivity will ________ potential GDP,________ employment,and ________ the real wage.
A) decrease; increase; raise
B) increase; increase; raise
C) increase; decrease; lower
D) increase; increase; lower

Question

Quizplus · Accepted Answer

An increase in productivity will lead to an increase in potential GDP, as output can be produced at a lower cost. This increase in GDP will lead to an increase in employment, as businesses will require additional workers to meet the demand for their products/services. Finally, an increase in productivity will lead to higher real wages, as workers are able to produce more output in the same amount of time, which will increase their bargaining power for higher wages.

An Increase in the Productivity Will ________ Potential GDP,________ Employment,and

An Increase in the Productivity Will Potential GDP, Employment,and