An increase in labor productivity ________ the real wage rate and an increase in population ________ the real wage rate.

Question

Quizplus · Accepted Answer

An increase in labor productivity raises the real wage rate because workers can produce more value per hour, which typically leads to higher wages. An increase in population lowers the real wage rate because it increases the supply of labor, potentially leading to lower wages due to higher competition for jobs.

An Increase in Labor Productivity ________ the Real Wage Rate