Suppose That a Technological Decline Makes Labor Less Productive

question 8

Multiple Choice

Suppose that a technological decline makes labor less productive. What is likely to happen to wages and to potential output?

• A) Wages increase and potential output increases.
• B) Wages increase and potential output decreases.
• C) Wages decrease and potential output increases.
• D) Wages decrease and potential output decreases.

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Definitions:

Cost-of-living Raises

Adjustments in salary or wages to counteract inflation, ensuring the purchasing power of an employee's income remains steady.

Equity

Refers to fairness or justice in the way people are treated.

Equality

The state of being equal, especially in status, rights, or opportunities, and often related to the fair treatment of individuals regardless of various differences.

Prosocial

Behaviors that are intended to help or benefit others.