Q26 · Practice questionComplex familiar1 mark
QUESTION 26
A successful skills program raises the productivity of workers. Its main long-term supply-side effect is
(A)
a compulsory fall in household income.
(B)
a permanent reduction in the labour force.
(C)
an increase in productive capacity.
(D)
an increase in inflation with no output effect.
WORKED SOLUTION
1 markAnswer C
Answer
C
Working
Improved skills can increase output per unit of labour and sustainable output. This can shift LRAS right; demand and short-run transition effects must be considered separately.
Marking criteria
- Select C. [1 mark]
Practice question aligned to the current QCAA syllabus; review the worked solution and marking criteria.
View the QCAA syllabus