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According to the United States Bureau of Labor Statistics, nonfarm business sector labor profitability increased at a 1.3 percent annual rate during the fourth quarter of 2016. (www.bls.gov). The yield increased by 2.4 percent, while hours employed increased by one percent. Productivity increased by 1% from the fourth quarter of 2015 to the fourth quarter of 2016. This illustrates yield increases. Furthermore, hours employed rose by 2.2 percent and 1.2 percent, respectively. From 2015 to 2016, annual total production increased by 0.2 percent. A change in productivity will impact the aggregate supply curve. The aggregate supply curve of goods and services will move to the right (www.bls.gov). This is due to an increase in productivity. The cost of key inputs will fall, making a mix of lower inflation, higher yield, and lower unemployment conceivable. On the hand, a reduction in productivity will shift the aggregate supply of goods and services to left. The cost of key inputs will rise and there will be a higher employment rate in the economy.
The term Real means the nominal value adjusted for inflation (Proquest Statistical Abstract of the United States 14). Real value is acquired by removing the impact of value level changes from the nominal value of time-series information, in order to get a more genuine picture of economic patterns. All other factors being constant, a higher rate of inflation leads to a reduction in the real current income and thus a lower rate of consumption (Proquest Statistical Abstract of the United States 15). The Average Real hourly income for all workers in the US rose by zero point one percent from January to February and regularly balanced according to the U.S. Agency of Labor Statistics. This outcome comes from a 0.2 percent rise in real hourly earnings consolidated with a zero point one percent increment in the Consumer Value Index for All Consumers living in the urban areas. The weekly average Real earnings rose by 0.1 percent throughout the month because of the expansion in the Real average hourly earnings consolidated with no adjustment in the average week's work.
In summary, I think that the impact of this change will lead to a decrease in the prices of spam foods. This is due to an increase in earnings by the workers which will lead to a lower price level. The lower price level will mean low inflation rate making the prices of the spam foods decrease. This will lead to a high demand for this foods because of their lower prices. The spam foods are a price item because they are affected by the changes in the price level.
Proquest Statistical Abstract of the United States 2017: The National Data Book. Bernan Pr, 2016. Print.
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