Assume an economy experiences, for a given period, a 4% increase in output and a 2% increase in productivity. Given this information, we know that which of the following occurred for this economy during this economy?
A) The employment growth rate is negative during this period.
B) The effects on employment are ambiguous.
C) Employment has increased during this period.
D) Employment has decreased during this period.
E) Employment has not changed during this period.

Question

Quizplus · Accepted Answer

An increase in productivity suggests that output per worker has increased. With a 4% increase in output, this means that there must have been an increase in employment as well, in order to produce the additional output. Therefore, employment has increased during this period.

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