A negative shock to productivity, A, will:
A)lower the job finding rate and raise the expected duration of unemployment.
B)lower the job finding rate and the expected duration of unemployment.
C)raise the job finding rate and lower the expected duration of unemployment.
D)raise the job finding rate and the expected duration of unemployment.

Question

Quizplus · Accepted Answer

A negative shock to productivity would lead to a decrease in the demand for labor, which would lower the job finding rate and increase the expected duration of unemployment. This means that it would be harder for unemployed individuals to find new jobs and they would remain unemployed for longer periods of time.

A Negative Shock to Productivity, A, Will