In the Two-Sided Search Model, the Equilibrium Effects of an Increase

question 51

Multiple Choice

In the two-sided search model, the equilibrium effects of an increase in productivity are to

• A) increase market tightness, decrease unemployment, and increase aggregate output.
• B) decrease market tightness, decrease unemployment, and increase aggregate output.
• C) decrease market tightness, decrease unemployment, and decrease aggregate output.
• D) increase market tightness, increase unemployment, and decrease aggregate output.
• E) increase market tightness, increases unemployment, and increases aggregate output.

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Definitions:

Back-To-School Shopping

The period in which students and their parents purchase school supplies and apparel before the new school year begins.

Spending

The action of using money to purchase goods or services.

Spending

The act of using money to purchase goods or services.

Income

Funds obtained, often on a recurring schedule, as a result of work or investment profits.