For This Question,assume Productivity Has Been Increasing by 5% Per

question 36

Multiple Choice

For this question,assume productivity has been increasing by 5% per year.Also assume that workers' expectations of productivity growth adjust slowly over time.For this economy,a reduction in productivity growth from 5% to 2% will most likely cause which of the following to occur?

• A)an increase in the natural rate of unemployment
• B)a reduction in the real wage
• C)an increase in the markup over labor costs
• D)all of the above
• E) none of the above

---

Definitions:

Predetermined Overhead Rate

A rate used to allocate estimated overhead costs to products or services, based on a preselected activity base.

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct materials and direct labor expenses.

Machine-Hours

The total number of hours that machinery is operating during a certain period, often used as a basis for allocating manufacturing overhead.

Manufacturing Overhead

All indirect factory-related costs incurred while producing a product, such as utilities and salaries for management.