Question

From 1973 to 1993, real wages

Group of answer choices
A) began to fall.
B) did not change.
C) rose sharply for almost all American workers.
D) fell gradually, then rose sharply.

Answer 1

From 1973 to 1993, real wages in the U.S. fell gradually due to a productivity slowdown and then adjusted over time, meaning the correct answer to the question is that wages fell gradually, then rose sharply.

Step-by-step explanation:

The question relates to the changes in real wages from 1973 to 1993 in the American workforce. During the 1970s, productivity growth in the U.S. slowed down unexpectedly which resulted in a situation where wage increases did not match the gains in productivity. The output per hour of U.S. workers in the business sector grew by 3.3% per year from 1960 to 1973 but slowed to just 0.8% from 1973 to 1982. The slowing productivity caused wages to continue rising even though the demand for labor was not increasing, leading to a higher natural rate of unemployment. Ultimately, over the period from 1973 to 1993, wages did adjust to the slower productivity gains, but this was a gradual process. Therefore, considering the options given in the question, the most accurate choice would be that real wages fell gradually, then rose sharply.