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Assume That Expectations of the Price Level and Productivity Are

Question 21

Multiple Choice

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?


A) A decrease in unemployment.
B) An increase in unemployment.
C) An increase in employment.
D) No change in unemployment.
E) A decrease in employment.

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