SSC CHSL 2014 · Question 43 of 209

DIRECTIONS: In Questions Nos. 146-150, The diagram shows Which of the following occurs when labour productivity rises ?

AThe equilibrium nominal wage falls
BThe equilibrium quantity of labour falls
CCompetitive firms will be induced to use more capital
DThe labour demand curve shifts to the rightCorrect

Answer: D. The labour demand curve shifts to the right

Explanation

curve shifts to the right. As the productivity increases, the production function shifts up and simultaneously the labour demand curve shifts out and right. At a given real wage, more workers are hired and output increases.

Source: SSC CHSL Solved Paper 16-11-2014 (Disha Publications) · reliable-secondary

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