Suppose That Nominal Wages Fall and Productivity Rises in a Particular

question 37

Multiple Choice

Suppose that nominal wages fall and productivity rises in a particular economy. Other things equal, the aggregate

• A) demand curve will shift leftward.
• B) supply curve will shift rightward.
• C) supply curve will shift leftward.
• D) expenditures curve will shift downward.

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Definitions:

Externalities

Costs or benefits that affect a party who did not choose to incur that cost or benefit, caused by an economic transaction.

Health Insurance

A form of insurance that covers medical expenses that arise due to illness or injury, typically providing coverage for a variety of healthcare services.

Quantity

The amount or number of a material or immaterial good considered as a unit or an aggregate.

Health Care Demanded

The quantity of health care services that individuals are willing and able to purchase at a given price.