Suppose an economy experiences an increase in productivity. Explain both the short-run and medium-run effects of this increase in productivity on output, employment, and the unemployment rate
What will be an ideal response?
In both the short run and medium run, TP will cause an increase in output (assuming, of course, that any change in AD, if it occurs, is offset by the shift in the AS curve). What happens to employment in the medium? Given that Y will rise by the full change in TP in the medium, we know that N and u will not be affected in the medium run. In the short run, N will rise and u will fall if the percentage change in Y is greater than the percentage change in TP.
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Refer to Table 9-18. Looking at the table above, what is the rate of growth of real average hourly earnings from 2015 to 2016?
A) 7.8% B) 6.25% C) 4% D) -4%
If buyers of a monopolistically competitive product feel the products of different sellers have little differences between them, then the demand for each seller's product is relatively elastic
Indicate whether the statement is true or false
If a country has a fixed exchange rate
A) central banks must buy and sell their holdings of currencies to maintain a given exchange rate. B) central banks have more control over real GDP in the economy. C) the exchange rate is allowed to fluctuate in response to changes in the supply and demand for currency. D) the equilibrium exchange rate in that market does not respond to changes in supply and demand for currency.
The cost incurred when the government collects taxes and uses resources to provide goods and services include:
a. the opportunity cost of the resources used b. the excess burden of the tax c. both of the above d. neither of the above