Answer to Question #96790 in Macroeconomics for Emily

Question #96790
Critically comment: Orthodox economists consider that labour demand is a decreasing function of the real wage rate. Therefore, a decrease in real wages must result into an increase in overall aggregate output.
1
Expert's answer
2019-10-21T08:19:40-0400

A decrease in real wages must result into an decrease in overall aggregate output, because the quantity of labor employed at this real wage rate will decrease.




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