Suppose a Country Imposes New Restrictions on How Many Hours

question 133

Multiple Choice

Suppose a country imposes new restrictions on how many hours people can work.If these restrictions reduce the total number of hours worked in the economy,but all other factors that determine output are held fixed,then

• A)productivity and output both rise.
• B)productivity rises and output falls.
• C)productivity falls and output rises.
• D)productivity and output fall.

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Definitions:

Keynesian

An economic theory suggesting that increased government expenditures and lower taxes can stimulate demand and pull the global economy out of a recession.

Rational Expectations

An economic theory that proposes people make choices based on rational judgements, accessible information, and previous experiences.

New Classical

An approach in economics emphasizing rational expectations and market clearing, often associated with a resurgence of classical economic principles.

Macroeconomists

Economists who specialize in studying the overall aspects of economies, including total output, unemployment, inflation, and economic growth.