If productivity rises, profits and wages can rise without inflation.

Name: If productivity rises, profits and wages can rise without inflation.
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Question

Quizplus · Accepted Answer

When productivity rises, the economy becomes more efficient in producing goods and services. This leads to lower costs and higher outputs, which can translate into higher profits for businesses and higher wages for workers. As long as the increase in productivity is not offset by an equal increase in the money supply, inflation is unlikely to occur.

If Productivity Rises, Profits and Wages Can Rise Without Inflation