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 period?
A)The unemployment rate increased during this period.
B)The unemployment rate decreased during this period.
C)The unemployment rate did not change during this period.
D)The effects on the unemployment rate are ambiguous.
E) none of the above

Question

Quizplus · Accepted Answer

An increase in output and productivity indicates that the economy is producing more goods and services with the same amount of resources. This suggests that there may be an increase in demand for labor, which could result in a decrease in unemployment. However, we cannot be certain of the exact effect on the unemployment rate without additional information. Therefore, the most accurate answer is that the unemployment rate did not change during this period.

Assume an Economy Experiences,for a Given Period,a 4% Increase in Output