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The most important determinant of the average wage level in the economy

The most important determinant of the average wage level in the economy is ________.

the value of output per hour worked
total quantity of output
the number of hours worked

Answered by Expert Tutors

the value of output per hour workedExplanationAny organization is most likely to incur losses if it pays its employees more than they have deservedly worked for. The best determinant of average wage level in any economy is the productivity per hour. As output increases, one expects higher returns and consequently higher wages for the respective workers. Additionally, human capital is an important determinant of productivity simply because the higher the human capital (e.g average level of education), the higher the labor productivity.

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