Because of Improved Productivity,wages Increase 10 Percent

question 12

Multiple Choice

Because of improved productivity,wages increase 10 percent.As a result,gross domestic income increases.What happens to gross domestic product?

• A)Gross domestic product also increases since consumption expenditures would increase.
• B)Gross domestic product decreases as people pay more taxes on their higher incomes.
• C)Gross domestic product would not change since consumption expenditures would rise but investment spending would fall.
• D)Gross domestic product would decrease because businesses are spending more on wages.

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