If Productivity Increases by 2 Percent but Wages Increase by 3

question 151

Multiple Choice

If productivity increases by 2 percent but wages increase by 3 percent, then it is most likely that the:

• A)short-run aggregate supply curve will shift up (to the left).
• B)short-run aggregate supply curve will shift down (to the right).
• C)short-run aggregate supply curve will not shift.
• D)aggregate demand curve will shift left.

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Definitions:

Bonds And Stocks

Financial instruments where bonds represent loans to an entity that pays periodic interest, and stocks represent ownership shares in a corporation.

Secondary Equity Offering

A process where a company that is already publicly traded issues additional shares to investors.

Market Value

The current market valuation at which a service or asset is being offered for sale or purchase.

Constant Annual Rate

A fixed annual interest rate applied over the life of an investment or loan, ensuring the rate does not change.