An increase in output due to either a positive supply or demand shock to production will lead to ________.

Question

Quizplus · Accepted Answer

An increase in output due to a positive supply or demand shock to production will result in an increase in the demand for labor, as firms will need to hire more workers to produce the additional output. This increased demand for labor will push real wages higher due to the greater competition for workers.

An Increase in Output Due to Either a Positive Supply