An increase in output will tend to
A) increase productivity in the economy as a whole
B) reduce prices of non-labor inputs and other commodities in limited supply in the short run
C) increase real wage rates
D) increase nominal wage rates
E) decrease the price level.

Question

Quizplus · Accepted Answer

An increase in output can lead to higher demand for labor, which can drive up nominal wage rates as firms compete to hire more workers.

An Increase in Output Will Tend to