Multiple Choice
For this question,assume that firms' of productivity are accurate while workers' expectations of productivity adjust slowly over time.In this case,an increase in productivity will cause which of the following?
A) an increase in both the real wage and the natural rate of unemployment
B) a decrease in both the real wage and the natural rate of unemployment
C) an increase in the real wage and a reduction in the natural rate of unemployment
D) a decrease in the real wage and an increase in the natural rate of unemployment
E) none of the above
Correct Answer:
Verified
Correct Answer:
Verified
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