If economy-wide productivity and the average wage each rise

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Suppose demand conditions in industries X and Y are identical but that productivity increases by 5% in industry X and 2% in industry Y. If economy-wide productivity and the average wage each rise by 3%, we should expect that:

a. output and employment in X will increase relative to Y

b. output and employment in X and Y will not change relative to one another, since wages will increase by 5% in X and 2% in Y

c. output and employment in Y will increase relative to X

d. no statement can be made concerning output and employment in either industry without more information

Reference no: EM13982144

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