If every business in the economy cuts their employees' wages, total profits in the economy will rise.

Question

Quizplus · Accepted Answer

If every business cuts their employees' wages, it will lead to a decrease in consumer spending as people will have less money to spend. This will ultimately result in a decrease in demand for goods and services, leading to lower profits for businesses. Additionally, employees may become demotivated and less productive, further reducing profits.

If Every Business in the Economy Cuts Their Employees' Wages