Suppose that a technological decline makes labor less productive. What is likely to happen to wages and to potential output?
A) Wages decrease and potential output increases. B) Wages increase and potential output decreases.
C) Wages increase and potential output increases. D) Wages decrease and potential output decreases.
D
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When macroeconomics refers to "full employment," what do they mean?
a. Full employment occurs when the unemployment rate equals zero. b. Full employment occurs when there is only frictional unemployment, and all other types of unemployment have been eliminated. c. Full employment occurs when there is only structural unemployment, and all other types of unemployment have been eliminated. d. Full employment occurs when there is only frictional unemployment, structural, and cyclical unemployment has been eliminated.
Which is FALSE about perfect competition?
A) There are numerous sellers. B) Market entry and exit is unrestricted. C) There is no ability to set price. D) There is considerable product differentiation.
Over the past year, output grew 6%, capital grew 2%, and labor grew 4%. If the elasticities of output with respect to capital and labor are 0.3 and 0.7, respectively, how much did productivity grow?
A. 2.0% B. 3.0% C. 3.3% D. 2.6%
In the above figure, the long-run equilibrium price level is
A) 150. B) 130. C) 110. D) not displayed.