Some economists argue that the productivity slowdown of the mid-1970s to the mid-1990s was due to changes in oil prices that
A)increased production costs,causing firms to reorganize production to conserve energy,which reduced output per worker.
B)decreased production costs,causing firms to reorganize production to conserve energy,which reduced output per worker.
C)increased production costs,causing firms to reorganize production to conserve energy,which increased output per worker.
D)decreased production costs,causing firms to increase production,which reduced output per worker.

Question

Quizplus · Accepted Answer

The increase in oil prices in the mid-1970s to the mid-1990s increased production costs for firms. This caused them to reorganize production to conserve energy, which in turn, reduced output per worker. This explanation is consistent with the productivity slowdown observed during that period.

Some Economists Argue That the Productivity Slowdown of the Mid-1970s