Total labor income equals the real wage times the amount of labor hired: W x L = WI. Labor's share of income is thus divided by output Y: WL WL PY Y Suppose that labor's share of total income is approximately constant over time, as Figure 3-5 in the text shows has been true of the U.S. If labor's share of income is approximately constant, the real wage O systematically diverges from labor productivity. O is inversely related to labor productivity. O closely tracks labor productivity. is unrelated to labor productivity.

Total labor income equals the real wage times the amount of labor hired: W x L = WI. Labor's share of income is thus divided by output Y: WL WL PY Y Suppose that labor's share of total income is approximately constant over time, as Figure 3-5 in the text shows has been true of the U.S. If labor's share of income is approximately constant, the real wage O systematically diverges from labor productivity. O is inversely related to labor productivity. O closely tracks labor productivity. is unrelated to labor productivity.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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