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Output rises in an economy but workers' real wages fall. What does this indicate?

Answer and explanation

Correct answer: Workers did not receive an adequate share of growth

The governing concept is that GDP or total output is not the same as workers’ welfare. Real wages measure purchasing power after considering prices. If output rises while real wages fall, workers can buy fewer goods and may receive little of the additional output. Thus option C is correct. The other choices make absolute claims that do not follow from the evidence.

Related tags

Real WagesGdp GrowthWorkers WelfarePurchasing PowerGdp And WelfareNational Income And Related AggregatesEconomicsClass 11 Mcq

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