The production and use of capital
A) reduces the productivity of labor and decreases wages.
B) reduces the productivity of labor and drives up wages.
C) enhances the productivity of labor and drives up wages.
D) enhances the productivity of labor and decreases wages.

Question

Quizplus · Accepted Answer

The production and use of capital can enhance the productivity of labor by providing workers with better tools and equipment, enabling them to produce more output in the same amount of time. This increased productivity can lead to higher wages as companies can afford to pay workers more due to the higher output they can produce. Therefore, option C is the correct answer as it suggests that the production and use of capital leads to increased productivity and higher wages.

The Production and Use of Capital