Question 1

Assume expectations of prices are correct but expectations of productivity adjust slowly.Use the PS / WS relations,graphically illustrate and explain the effects of a decrease in productivity growth on the natural rate of unemployment.

Accepted Answer

The answer of Assume expectations of prices are correct but...

Question 2

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?

Accepted Answer

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

Question 3

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.

Accepted Answer

The answer of Some commentators will argue that increases in...

Question 4

Assume an economy experiences an increase in productivity that occurs as a result of a more widespread implementation of a major technological breakthrough.Given this information,we would expect which of the following to occur?

Accepted Answer

A) aggregate demand would not change 
B) aggregate demand would shift to the right 
C) aggregate demand would shift to the left 
D) both the aggregate demand and aggregate supply curves would shift to the left

Question 5

For this question,assume that expectations of productivity growth adjust slowly.Now,suppose that there is a 5% increase in productivity.Explain how this 5% increase in productivity can cause changes in the unemployment rate.

Accepted Answer

The answer of For this question,assume that expectations of productivity...

Question 6

For this question,assume that expectations of P and A are correct.Based on price setting behavior,the real wage will be equal to which of the following?

Accepted Answer

A) A / (1+m) 
B) AP / (1+m) 
C) APF(u,z) 
D) P(1 + m) 
E) none of the above

Question 7

Based on price setting behavior,which of the following will cause an increase in the price level?

Accepted Answer

A) a reduction in productivity 
B) an increase in the nominal wage 
C) an increase in the markup 
D) all of the above 
E) none of the above

Question 8

Suppose an economy experiences an increase in productivity.The AD curve will most likely shift to the right when this increase in productivity is the result of which of the following?

Accepted Answer

A) a major technological breakthrough 
B) a reorganization of production designed to reduce costs with existing technology 
C) an increase in human capital 
D) government subsidies for higher education 
E) none of the above

Question 9

"Churning" refers to

Accepted Answer

A) changes in the real wage over the business cycle. 
B) changes in the markup over the business cycle. 
C) structural change associated with technological progress. 
D) the increase in productivity caused by an increase in output. 
E) the increase in output caused by an increase in productivity.

Question 10

For this question,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

Accepted Answer

A) the PS relation to shift up more than the WS relation. 
B) the WS relation to shift up more than the PS relation. 
C) the natural rate of unemployment to fall. 
D) the real wage to fall.

Question 11

An increase in productivity will cause which of the following according to the price-setting behavior of firms?

Accepted Answer

A) a reduction in prices set by firms 
B) an increase in the real wage paid by firms 
C) a reduction in the markup set by firms 
D) all of the above 
E) none of the above

Question 12

When the unemployment rate is on the horizontal axis and the real wage is on the vertical axis,an increase in productivity will cause which of the following to occur?

Accepted Answer

A) the wage-setting and price-setting curves will both shift downward. 
B) the wage-setting and price-setting curves will both shift upward. 
C) the price-setting curve to shift downward,and no shift in the wage-setting curve. 
D) the wage-setting curve to shift upward,and the price-setting curve to shift downward. 
E) the wage-setting curve to shift downward,and the price-setting curve to shift upward.

Question 13

Explain how technological change can cause changes in wage inequality.

Accepted Answer

The answer of Explain how technological change can cause changes...

Question 14

Based on price setting behavior,which of the following will cause a reduction in the price level?

Accepted Answer

A) an increase in productivity 
B) a reduction in the nominal wage 
C) a reduction in the markup 
D) all of the above 
E) none of the above

Question 15

Employment will increase as a result of an increase in productivity when which of the following occurs?

Accepted Answer

A) the AS curve shifts upward 
B) output growth is more than productivity growth 
C) productivity growth is more than output growth 
D) the AD curve shifts to the left 
E) none of the above

Question 16

Among the reasons that the poor countries have been unable to close the "technology gap" with the rich countries is

Accepted Answer

A) poorly established property rights. 
B) poorly developed financial markets. 
C) low education levels. 
D) all of the above 
E) none of the above

Question 17

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

Accepted Answer

A) less technological progress of the kind we've experienced in the past 15 years 
B) new types of production technology that require workers to have more skills 
C) an increase in the costs of going to college 
D) all of the above 
E) none of the above

Question 18

Suppose an economy experiences an increase in productivity.The AD curve will most likely shift to the left when this increase in productivity is the result of which of the following?

Accepted Answer

A) a major technological breakthrough 
B) a reorganization of production designed to reduce costs with existing technology 
C) an increase in human capital 
D) government subsidies for higher education 
E) none of the above

Question 19

Technological unemployment is a macroeconomic phenomenon that occurs when

Accepted Answer

A) unemployment changes due to the effects of technology in high-technology industries. 
B) unemployment changes due to the effects of monetary and fiscal policy in the New Economy. 
C) hysterisis. 
D) Eurosclerosis. 
E) unemployment changes as a result of technological change.

Question 20

For this question,assume expectations of P and A are correct.Now suppose that there is a 3% reduction in A.Given this information,which of the following will occur?

Accepted Answer

A) the PS relation will shift up by 2%. 
B) the WS relation will shift down by less than 2%. 
C) the WS relation will shift down by 2%. 
D) there will be no change in the real wage.

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

Assume expectations of prices are correct but expectations of productivity adjust slowly.Use the PS / WS relations,graphically illustrate and explain the effects of a decrease in productivity growth on the natural rate of unemployment.

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?

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.

Assume an economy experiences an increase in productivity that occurs as a result of a more widespread implementation of a major technological breakthrough.Given this information,we would expect which of the following to occur?

For this question,assume that expectations of productivity growth adjust slowly.Now,suppose that there is a 5% increase in productivity.Explain how this 5% increase in productivity can cause changes in the unemployment rate.

For this question,assume that expectations of P and A are correct.Based on price setting behavior,the real wage will be equal to which of the following?

Based on price setting behavior,which of the following will cause an increase in the price level?

Suppose an economy experiences an increase in productivity.The AD curve will most likely shift to the right when this increase in productivity is the result of which of the following?

"Churning" refers to

For this question,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

An increase in productivity will cause which of the following according to the price-setting behavior of firms?

When the unemployment rate is on the horizontal axis and the real wage is on the vertical axis,an increase in productivity will cause which of the following to occur?

Explain how technological change can cause changes in wage inequality.

Based on price setting behavior,which of the following will cause a reduction in the price level?

Employment will increase as a result of an increase in productivity when which of the following occurs?

Among the reasons that the poor countries have been unable to close the "technology gap" with the rich countries is

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

Suppose an economy experiences an increase in productivity.The AD curve will most likely shift to the left when this increase in productivity is the result of which of the following?

Technological unemployment is a macroeconomic phenomenon that occurs when

For this question,assume expectations of P and A are correct.Now suppose that there is a 3% reduction in A.Given this information,which of the following will occur?