Which of the following is NOT a reason why natural GDP might fall as a result of a supply shock?
A) The production function shifts downward.
B) There might be a voluntary decline in the supply of labor in response to the decline in real wages.
C) The supply of labor is a function of the expected wage rate.
D) none of the above
Correct Answer:
Verified
Q71: The natural real GDP will _ following
Q72: A supply shock,such as the OPEC oil-price
Q73: Figure 17-3 Q74: An adverse supply shock with a vertical Q75: The more that firms in an economy Q77: The more that firms in an economy Q78: Classical macroeconomic theory was discredited and gave Q79: A supply shock that reduces labor productivity Q80: Figure 17-3 Q81: Which explanation for persistent unemployment used by
A)causes
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