Assume That a Country Experiences a Reduction in Productivity That

question 38

Multiple Choice

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

• A) a lower real wage and a rise in unemployment.
• B) a lower real wage and no change in unemployment.
• C) a lower real wage and less unemployment.
• D) no change in real wage or in unemployment.

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