The number of workers employed will not change as a result of an increase in productivity when which of the following occurs?
A)The AS curve shifts downward.
B)Output growth exceeds productivity growth.
C)Productivity growth is equal to output growth.
D)The AD curve shifts to the right.
E) none of the above

Question

Quizplus · Accepted Answer

When productivity growth is equal to output growth, the firm can increase production without increasing the number of workers employed. This is because productivity is measured as output per worker, and if output per worker is increasing at the same rate as total output, then the firm can increase output without hiring more workers. Therefore, an increase in productivity without a corresponding increase in output growth will result in no change in the number of workers employed. Choices A, B, and D all involve changes in output levels, which could result in changes in the number of workers employed.

The Number of Workers Employed Will Not Change as a Result