Productivity Declines May Worsen Recessions by Causing Unit Labor Costs

question 17

Multiple Choice

Productivity declines may worsen recessions by causing unit labor costs to:

• A)rise,thereby resulting in falling profits and lower investment spending
• B)rise,thereby resulting in greater retained earnings by firms
• C)fall,thereby creating incentives for government intervention
• D)fall,thereby reducing consumer spending power

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Definitions:

Markdown

A reduction from the original or standard price of a product or service, typically to encourage sales.

Mark-up

Added value to the purchasing price of merchandise to include overhead and profit.

Unsold Products

Items or goods that have been manufactured or acquired for sale but have not yet been purchased by customers.

Selling Price

The actual amount a customer pays for a product or service.