If actual output is greater than the full-employment level of output,we should expect wages to increase over time.

Question

Quizplus · Accepted Answer

If actual output is greater than the full-employment level of output, it means that the economy is experiencing an expansionary phase and there is growing demand for goods and services. As a result, firms will need to hire more workers to produce more output, and this will create an upward pressure on wages as labor markets tighten. Therefore, we should expect wages to increase over time in this situation.

If Actual Output Is Greater Than the Full-Employment Level of Output,we