QUESTION IMAGE
Question
multiple choice question
why do real wages not always rise in lockstep with gains in productivity over short spans of time?
o worker wage negotiation skills have declined in recent decades.
o federal income ceilings limit the growth of wages.
o tax rates tend to grow disproportionately with the rate of productivity in most economies.
o suppliers of land, capital, and entrepreneurial talent receive a portion of the income from
production.
In an economy, production involves multiple factors - land, capital, labor, and entrepreneurial talent. When productivity increases, the income from production is distributed among all these factors. Workers (labor) don't get the entire increase as suppliers of land (rent), capital (interest), and entrepreneurial talent (profit) also claim their shares. Worker wage negotiation skills decline is too specific and not a general reason. Federal income ceilings are not a common widespread factor affecting this relationship. Tax rates growing disproportionately is also not the main and most fundamental reason compared to factor distribution.
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Suppliers of land, capital, and entrepreneurial talent receive a portion of the income from production.