Asked by Anusree Nambiar on Jul 27, 2024

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The productivity and real wages of workers in industrially advanced economies have risen historically partly because:

A) workers have acquired less education and training over time.
B) workers have been able to use larger quantities of capital equipment.
C) over time the capital equipment used by workers has deteriorated in quality.
D) the supply of labor has increased.

Real Wages

Wages adjusted for inflation, representing the true purchasing power of income.

Capital Equipment

Capital equipment consists of tangible assets such as buildings, machinery, and tools that are used in the production process to generate goods and services.

  • Describe the influence of enhancements in labor productivity on the compensation of employees.
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Verified Answer

BJ
Bahavar JahaniJul 28, 2024
Final Answer :
B
Explanation :
The use of larger quantities of capital equipment has allowed workers to be more productive, leading to an increase in real wages. Option A is incorrect because acquiring more education and training typically leads to increased productivity and higher wages. Option C is incorrect because deteriorating quality of capital equipment would lead to lower productivity and wages. Option D is incorrect because an increase in labor supply, ceteris paribus, would lead to lower wages.