The equilibrium effects of a prospective future increase in total factor productivity include
A) a decrease in the real wage only.
B) a decrease in the real wage and a decrease in the real interest rate.
C) an increase in the real wage and a decrease in the real interest rate.
D) a decrease in the real wage and an increase in the real interest rate.
E) an increase in the real wage and an increase in the real interest rate.
Correct Answer:
Verified
Q12: An increase in total factor productivity causes
A)real
Q13: The slope of the demand for consumption
Q14: The marginal rate of substitution of future
Q15: When drawn against the real interest rate,
Q16: The representative consumer's current labour supply curve
Q18: A rational bubble is
A)when everyone behaves optimally
Q19: When drawn against the real interest rate,
Q20: The total government expenditure multiplier is less
Q21: For the economy as a whole, investment
Q22: Investment will be more variable if the
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