A slowdown in the United States' rate of increase in productivity is of concern to policy makers because it
A) reduces our dependency on imports.
B) may contribute to a higher rate of inflation.
C) shifts the Phillips curve downward to the left.
D) forces interest rates too low.
E) makes foreign producers less competitive.

Question

Quizplus · Accepted Answer

A slowdown in productivity may lead to higher costs of production and therefore higher prices, which in turn can contribute to inflation. This is a concern for policymakers as it can negatively impact the economy and lead to a decrease in the standard of living for individuals.

A Slowdown in the United States' Rate of Increase in Productivity