How Will an Increase in Labour Productivity Affect Equilibrium in the Labour

question 189

Multiple Choice

How will an increase in labour productivity affect equilibrium in the labour market?

• A)The supply of labour will increase and the equilibrium wage and quantity of labour will increase.
• B)The demand for jobs will increase and the equilibrium wage and quantity of labour will increase.
• C)The demand for labour will increase and the equilibrium wage and quantity of labour will increase.
• D)The demand for labour will decrease because fewer workers will be needed to produce the same output.The equilibrium wage and quantity of labour will decrease.

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Definitions:

GDP

Gross Domestic Product; the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

Total Government Spending

The sum of all expenditures made by the government in a specified period, including spending on goods and services, public projects, and social assistance programs.

Economy's Total Output

The total value of all goods and services produced within an economy over a specific period, often measured as Gross Domestic Product (GDP).

Government Purchases

Expenditures by government entities for goods and services that are directly consumed or used in providing public services.