In the movie (and book) Sahara, toxic waste is leeching into Mali's groundwater. Which of the following effects would you expect to occur in the DSGE framework?
i. A decline in the marginal product of labor
ii. An increase in output
iii. A decline in the real wage
A) i and iii
B) i
C) ii and iii
D) iii
E) i, ii, and iii

Question

Quizplus · Accepted Answer

The toxic waste leeching into Mali's groundwater would lead to a decline in the productivity of labor due to the adverse health effects and a decline in the real wage as the demand for labor decreases. However, it is unlikely to lead to an increase in output as the pollution negatively affects the environment and human health.

In the Movie (And Book) Sahara, Toxic Waste Is Leeching