For this question, assume that expectations of productivity are slow to adjust. An increase in productivity growth from 1% to 3% will cause
A) an increase in the real wage of 1% and an increase in un.
B) an increase in the real wage of 1% and a reduction in un.
C) an increase in the real wage of 3% and an increase in un.
D) an increase in the real wage of 3% and a reduction in un.
D
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The number of persons who could become lawyers or surgeons is potentially quite large, yet these two groups earn fairly high incomes. One of the main reasons why they do is the
A. return on the investment of many years of training. B. evening-out of their low income during schooling. C. rent on their unique and rare talents. D. scarcity value of their abilities.
Relative performance evaluation reduces the labor cost borne by the firm by:
A. using the employee's output for setting the compensation. B. focusing on the near term while setting incentive pay. C. ratcheting up each year's performance targets. D. filtering out common shocks from employee incentive pay.
In a competitive market, strategic interactions among the firms are not important
a. True b. False Indicate whether the statement is true or false
As output rises, average fixed cost __________.
Fill in the blank(s) with the appropriate word(s).