When There Is a Temporary Increase in Total Factor Productivity

question 65

Multiple Choice

When there is a temporary increase in total factor productivity,

• A) labour demand increases and output supply decreases.
• B) labour demand decreases and output demand increases.
• C) labour demand increases and output demand increases.
• D) labour demand decreases and output supply decreases.
• E) labour demand increases and output supply increases.

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Definitions:

Heuristic

A rule-of-thumb or shortcut that is used to make decisions or solve problems more quickly.

Algorithm

A step-by-step procedure for calculations, data processing, and automated reasoning tasks.

Representativeness Heuristic

A cognitive shortcut where people categorize situations or individuals based on how similar they are to typical cases or categories they know.

Prototypes

Original models or first forms from which subsequent forms are derived or developed; in psychology, widely accepted examples of a certain category.