📚 Learning Guide
Real Wages and Exports Impact
easy

Which of the following statements accurately describe the impact of higher exports on real wages in the short run? Select all that apply.

Master this concept with our detailed explanation and step-by-step learning approach

Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Higher exports can lead to an increase in nominal wages due to increased demand for labor.

B

If nominal wages remain fixed and the price level rises, real wages will decline.

C

Higher exports do not affect real wages if the domestic economy is not growing.

D

An increase in exports can stimulate economic growth, potentially leading to higher real wages in the long run.

E

Real wages will always increase with higher exports regardless of price level changes.

Understanding the Answer

Let's break down why this is correct

Answer

Higher exports can lead to an increase in real wages in the short run because when a country sells more goods to other countries, it often needs to produce more. This increase in production usually means that businesses hire more workers or pay existing workers more to meet the demand. As companies earn more from selling their goods abroad, they may also have more money to invest in their employees, which can result in higher wages. For example, if a factory increases its exports of toys, it might need to pay workers overtime or hire additional staff, leading to higher overall wages in that sector. Therefore, higher exports can positively impact real wages by creating more jobs and increasing pay in the short term.

Detailed Explanation

Higher exports can help the economy grow, but they don't guarantee higher real wages right away. Other options are incorrect because This suggests that higher exports always raise wages quickly; This implies that fixed wages mean real wages will always drop.

Key Concepts

Real Wages
Exports Impact
Aggregate Demand
Topic

Real Wages and Exports Impact

Difficulty

easy level question

Cognitive Level

understand

Ready to Master More Topics?

Join thousands of students using Seekh's interactive learning platform to excel in their studies with personalized practice and detailed explanations.