According to the Real Business Cycle Theory, Technological Advances

question 63

Multiple Choice

According to the real business cycle theory, technological advances:

• A) increase the productivity of labor, which causes real wages and output to decline.
• B) increase the productivity of labor, which causes real wages and output to increase.
• C) increase the productivity of labor, which causes real wages to increase and output to decline.
• D) decrease the productivity of labor, which causes real wages and output to increase.

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Definitions:

Contribution Margin

The amount of revenue from sales that exceeds variable costs, indicating how much contributes to covering fixed costs and generating profit.

Fixed Costs

Expenses that do not change with the level of production or sales activity, such as rent and salaries.

Traceable Fixed Expense

Fixed expenses that can be directly linked to a specific department, project, or segment within a company.

Net Operating Income

A calculation of a firm's profit, determined by deducting operational costs from the income gained through business activities.