Assume That a Country Experiences a Reduction in Productivity That

question 86

Multiple Choice

Assume that a country experiences a reduction in productivity that shifts the labor demand curve downward and to the left. If the real wage were rigid, this would lead to:

• A) no change in the real wage and a rise in unemployment.
• B) no change in the real wage and no change in unemployment.
• C) no change in the real wage and a fall in unemployment.
• D) a decrease in the real wage.

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