In the Two-Sided Search Model, an Increase in Productivity Causes

question 5

Multiple Choice

In the two-sided search model, an increase in productivity causes

• A)labour market tightness to fall and output to fall.
• B)labour market tightness to rise and output to fall.
• C)the vacancy rate to rise and the unemployment rate to fall.
• D)output to fall and the vacancy rate to fall.
• E)the vacancy rate and the unemployment rate to fall.

---

Definitions:

Government Budget Deficit

An indication of financial health in which government spending exceeds revenue over a particular period, often leading to borrowing.

Loanable Funds

Funds available for borrowing, which come from savings deposited in banks or from other sources of capital.

Government Budget Deficit

The financial situation where a government's expenditures exceed its revenues within a specific period, often leading to borrowing.

Government Budget Surplus

A financial situation in which a government's revenues exceed its expenditures during a specific period of time.