If Real GDP Falls by 2% While Work Hours Fall

question 13

Multiple Choice

If real GDP falls by 2% while work hours fall by 10%,then labor productivity:

• A)falls
• B)is unchanged
• C)rises
• D)might fall,but we cannot know without more information

Analyze the impact of minimum wage laws on employment and wages.

Comprehend the relationship between wages, productivity, and economic forces.

Recognize the factors determining the demand for labor and the concept of marginal revenue product.

Identify the effects of income and substitution effects on labor supply and demand.

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Definitions:

Dividends Received

Income received from shares in a company, typically distributed from profits to shareholders as decided by the board of directors.

Short-Term Investment

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle.

Readily Marketable

Assets that can be sold quickly and with minimal impact on their price due to their appeal to a wide range of buyers.

Operating Cycle

The average time that it takes to purchase inventory, sell it on account, and then collect cash from customers.