Which of the following is true in regards to Okun's law?
A) employment does not increase commensurately with output rises because firms tend to hoard labor
B) when demand increases, firms tend to work their employees harder and longer
C) it is Okun's prediction of the negative relationship between the output and unemployment gaps that allows the modern Phillips curve to be translated into the AS curve
D) all of the above
E) none of the above
D
You might also like to view...
The aggregate demand curve is usually
A) downward sloping. B) vertical. C) horizontal. D) upward sloping.
Economists who focus on long-run growth suggest that the government could lower taxes on labor income in order to increase employment
a. True b. False
The relative price of a pineapple today in terms of pineapples tomorrow is given by
a. 1 - r b. r c. 1 + r d. 1/(1 + r)
During a recession, the political incentive structure will encourage politicians to
a. undertake sound economic policies that are consistent with stability and growth. b. adopt any policies, even bad ones, that give the appearance of taking action. c. undertake policies that promote long-term economic growth rather than short-term benefits. d. do nothing and let the recession run its course.