Assume an Economy Experiences, for a Given Period, a 4

question 24

Multiple Choice

Assume an economy experiences, for a given period, a 4% increase in output and a 4% increase in productivity. Given this information, we know that which of the following occurred for this economy during this economy?

• A) Employment has increased during this period.
• B) The employment growth rate is negative during this period.
• C) Employment has not changed during this period.
• D) The effects on employment are ambiguous.
• E) Employment has decreased during this period.

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Definitions:

Call Option Contract

A financial contract that gives the holder the right, but not the obligation, to buy a stated amount of a security at a predetermined price within a specific time period.

Put Option

An agreement that grants the holder the option to sell a predetermined quantity of a basic asset at an agreed price during a defined period, without being obligated to do so.

Risk-Free Asset

An investment security that is guaranteed to return its full investment value (e.g., U.S. Treasury securities).

Market Price

The existing rate at which an asset or service can be sold or bought.