Exam 3: Productivity, output, and Employment

For the economy of Lower Volta,the MPN is given by MPN = 400 - 0.2N where N is aggregate employment.The aggregate quantity of labour supplied is 500 + 10(1 - t)w where t is the income tax rate and w is the real wage.Assume that the income tax rate is 50%.What is the before-tax real wage?

Which of the following statements is true?

The table below represents Freedonia's macroeconomic data for 2002 and 2003. Year Y 2002 2000 1700 70 2003 2100 1785 75 Suppose that the production function is given by Y = AK?.²? ??.??.Between 2002 and 2003,total factor productivity of Freedonia's economy increased by

An increase in labour participation rate will lead to

Take an economy where in 2001 real GDP is 4861.4,the capital stock is 13,806.2 and employment is 118.4 (in millions of workers).In 2002 the numbers were: real GDP 4986.3,capital stock 14,040.8,employment 119.2.Suppose the production function in both years is Y = AK⁰.²⁵ᴺ⁰.⁷⁵. a.Calculate total factor productivity for 2001 and 2002. b.How much did total factor productivity grow from 2001 to 2002? c.Calculate the percent increase in real output between 2001 and 2002. d.Suppose tax incentives had raised the capital stock in 2002,making it 10% higher,at 15,444.9.If employment didn't change,what would have been the percent increase in real output between 2001 and 2002? e.Instead of the increase in the capital stock in part d,suppose employment was 10% higher in 2002,making it 131.1.With the capital stock fixed at 14,040.8,what would have been the increase in real output between 2001 and 2002?

A favourable supply shock would

Parliament has just passed a law allowing more immigration of young workers into Canada.How would you expect this to affect the nation's labour supply curve?

The city of Hope has a labour force of 1000.Twenty people lose their jobs each month and remain unemployed for exactly one month before finding jobs.On January 1,May 1,and September 1 of each year,50 people lose their jobs for a period of four months before finding new jobs.What is the average duration of an unemployment spell?

The overall effectiveness with which capital and labour are used is called

The recent rise in oil price most likely will NOT cause recession in Canada,because

The principle of diminishing marginal productivity implies that