Question

Real wages in the United States in the long run:
1. show no discernible relationship to output per worker.
2. have increased at about the same rate as increases in output per worker.
3. have increased slower than increases in output per worker.
4. have increased faster than increases in output per worker

Answer 1

Answer:

2. have increased at about the same rate as increases in output per worker.

Explanation:

According to neoclassical economic theory (or mainstream economic theory), real wages should be equal to the marginal product of labor. The marginal product of labor is the amount of extra output from one extra unit of labor.

In other words, the marginal productivity of labor measures the extra quantity of goods produced by one additional worker.

In recent decades however, a gap between labor productivity and real wages has been widening, which is concerning because this is one of many factors behind the increasing income and wealth inequality in the U.S.