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?
A) Employment has increased during this period.
B) The employment growth rate is negative during this period.
C) Employment has not changed during this period.
D) The effects on employment are ambiguous.
E) Employment has decreased during this period.

Question

Quizplus · Accepted Answer

If output and productivity both increase by 4%, it means that the same amount of output is being produced more efficiently but does not necessarily require more labor. Therefore, employment has not changed, as the increase in productivity compensates exactly for the increase in output.

Assume an Economy Experiences, for a Given Period, a 4