Suppose Workers Expectations of Prices and Productivity Are Accurate

question 4

Multiple Choice

Suppose workers expectations of prices and productivity are accurate. For this economy, an increase in productivity will cause which of the following?

• A) An increase in both the real wage and the natural rate of unemployment.
• B) A decrease in both the real wage and the natural rate of unemployment.
• C) An increase in the real wage and no change to the natural rate of unemployment.
• D) An increase in the real wage and a decrease in the natural rate of unemployment.
• E) A decrease in the real wage and an increase in the natural rate of unemployment.

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Definitions:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.