Suppose Workers' and Firms' Expectations of the Price Level and Productivity

question 29

Multiple Choice

Suppose workers' and firms' expectations of the price level and productivity are accurate.In this case,a reduction in productivity will cause which of the following?

• A)a decrease in both the real wage and the natural rate of unemployment
• B)an increase in both the real wage and the natural rate of unemployment
• C)a decrease in the real wage and no change in the natural rate of unemployment
• D)an increase in the real wage and a decrease in the natural rate of unemployment
• E) none of the above

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Definitions:

Liability

The state of being legally responsible for something, typically a debt or obligation.

Note

A financial instrument recognizing a debt or obligation, typically with the promise to repay the principal along with potential interest.

Revised Article 3

An update to a section of the Uniform Commercial Code that deals with negotiable instruments, including changes to laws governing checks and promissory notes.

Drawer

In banking, the party that writes or issues a check. In a broader contract or legal sense, it can refer to the person who drafts or creates a document.