An increase in outout 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 indicates an increase in the demand for labor, leading to higher real wages. This is because an increase in output requires more labor input, leading to a higher demand for workers, and the scarce availability of labor leads to higher wages as employers try to attract workers.

An Increase in Outout Due to Either a Positive Supply