Because of Improved Productivity, Wages Increase 10 Percent

Multiple Choice

Because of improved productivity, wages increase 10 percent. As a result, gross domestic income increases. What happens to Gross Domestic Product?

A) Gross Domestic Product also increases since consumption expenditures would increase.
B) Gross Domestic Product decreases as people pay more taxes on their higher incomes.
C) Gross Domestic Product would not change since consumption expenditures would rise but investment spending would fall.
D) Gross Domestic Product would decrease because businesses are spending more on wages.