Exam 13: Technological Progress: the Short, the Medium and the Long Run

Assume that expectations of the price level and productivity are accurate. Now suppose that the economy experiences an increase in productivity. Which of the following will occur in the medium run?

Which of the following statements about Australia during the 1996- 2011 period is correct?

Which of the following represents the wage- setting relation when changes in labour productivity are allowed to occur?

Assume an economy experiences, for a given period, a 4% increase in output and a 4% increase in productivity. Given this information, we know that which of the following occurred for this economy during this economy?

Which of the following represents the broad definition of good institutions for economic growth?

When was the last year that GDP per capita in North Korea was approximately equal to GDP per capita in South Korea?

Based on our understanding of the price- setting equation, which of the following will not cause a decrease in the price level?

Explain what effect a decrease in productivity has on wage- setting behaviour, price- setting behaviour, the equilibrium real wage, the natural rate of unemployment, and the natural level of output.

Assume that expectations of productivity are slow to adjust. Further assume that A had been increasing by 6% a year. Now suppose that A only increases by 2% in period t. This slowdown in productivity growth will cause:

Which of the following is not true about technological progress?

Because of labour hoarding, an increase in output may signal:

"Churning" refers to:

Which of the following would increase the gap in wages between skilled and unskilled workers?

Assume that expectations of P and A are correct. Now suppose that there is a 4% decrease in A. Given this information, which of the following will occur?

Assume an economy experiences an increase in productivity that occurs as a result of the more efficient use of existing technologies. Given this information, we would expect which of the following to occur?

Assume that expectations of productivity are slow to adjust. Further assume that A had been increasing by 2% a year. Now suppose that A increases by 6% in period t. This increase in productivity growth will cause:

Suppose the aggregate production function is represented by Y = AN. Given this information, labour productivity is given by:

Using the AS- AD model, graphically illustrate and explain the short- run and medium- run effects of a decrease in productivity. In your graph, clearly label all curves and equilibria. For simplicity, assume that the change in productivity has no effect on aggregate demand.

Explain some of the causes of increased wage inequality.

Some commentators will argue that increases in productivity may have no effect or even a negative effect on employment in the short run. Explain what must occur for an increase in productivity to have no effect or even a negative effect on employment in short run.