If the perceive real wage goes up, real GDP increases:
A)unless the actual real wage remains the same or falls.
B)in the long run.
C)in the short run.
D)all of the above.

Question

Quizplus · Accepted Answer

In the short run, if workers perceive their real wage (the purchasing power of their earnings) to have increased, they may be more willing to work more hours or be more productive, leading to an increase in real GDP. However, this effect may not hold in the long run or if the actual real wage does not change, as adjustments in the labor market or inflation can offset the initial perceived increase.

If the Perceive Real Wage Goes Up, Real GDP Increases