Suppose the U

question 43

Multiple Choice

Suppose the U.S.economy is producing at the natural rate of output.A depreciation of the U.S.dollar will cause ________ in real GDP in the short run and ________ in the aggregate price level in the long run,everything else held constant.(Assume the depreciation causes no effects in the supply side of the economy.)

• A)an increase; an increase
• B)a decrease; a decrease
• C)no change; an increase
• D)no change; a decrease

Comprehend the effects of wage increases on employment levels and total wage payments in different elasticity scenarios.

Understand the impact of labor cost proportion on the elasticity of labor demand.

Identify the influence of product demand elasticity on industry-specific labor demand elasticity.

Analyze the implications of labor demand elasticity for union wage negotiations and employment outcomes.