Some commentators will argue that increases in productivity may ...

[renzo156]

Some commentators will argue that increases in productivity may have no effect or even a negative effect on employment in the short run. Explain what must occur for an increase in productivity to have no effect or even a negative effect on employment in short run.
 
  What will be an ideal response?

Question 2

Which of the following will occur when the central bank pursues expansionary monetary policy?
 
  A) a leftward shift in the money demand curve and a leftward shift in the money supply curve
  B) a rightward shift in the money demand curve and a leftward shift in the money supply curve.
  C) a leftward shift in the money demand curve and a rightward shift in the money supply curve.
  D) a rightward shift in the money demand curve and a rightward shift in the money supply curve.
  E) none of the above

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Answer to Question 1

An increase in productivity will have no effect on employment if the percentage change in output equals the percentage change in productivity. Employment will fall if the percentage change in output is less than the percentage change in productivity. This can be seen from Y = AN which implies that N = Y/A.

Answer to Question 2

E

[renzo156]

Wow, this really help

[rleezy04]

Thanks for the timely response, appreciate it