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.

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter17: Economic Growth: Resources, Technology, Ideas And Institutions

Section17.2: A Production Function And Economic Growth

Problem 4ST

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