Assume an economy experiences,for a given period,a 5% increase in output and a 1% 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

A 5% increase in output with only a 1% increase in productivity suggests that more labor was likely employed to achieve the additional output, leading to a decrease in the unemployment rate.

Assume an Economy Experiences,for a Given Period,a 5% Increase in Output