An increase in worker productivity will lead to a:
A) Negative demand shock
B) Positive demand shock
C) Negative supply shock
D) Positive supply shock

Question

Quizplus · Accepted Answer

An increase in worker productivity would lead to a positive supply shock. This is because increased productivity would result in an increase in the supply of goods and services produced. As a result, prices would decrease, leading to an increase in demand, which is a positive demand shock. However, this increase in supply would also increase economic growth, leading to higher employment levels and incomes, which would also have a positive impact on demand.

An Increase in Worker Productivity Will Lead to A