Assume That Expectations of Productivity Are Slow to Adjust

question 29

Multiple Choice

Assume that expectations of productivity are slow to adjust. Further assume that A had been increasing by 6% a year. Now suppose that A only increases by 2% in period t. This slowdown in productivity growth will cause:

• A) the WS relation to shift up more than the PS relation.
• B) the PS and WS relations to shift up by the same amount.
• C) the real wage to fall.
• D) the PS relation to shift up more than the WS relation.
• E) the natural rate of unemployment to fall.

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Definitions:

Aerobic Activities

Physical exercises that increase the heart rate and improve the efficiency of the cardiovascular system in absorbing and transporting oxygen.

Muscular Strength

The maximum amount of force a muscle or muscle group can exert in a single effort.

Running

A form of aerobic exercise that involves rapid foot movement to propel the body forward in a steady, rhythmic motion.

Exercise Shoes

Footwear designed specifically to provide support, stability, and comfort during physical activity, reducing the risk of injury.