Because of labor hoarding, an increase in output may signal A) ...

[ishan]

Because of labor hoarding, an increase in output may signal
 
  A) an increase in employment.
  B) a reduction in employment.
  C) no change in employment.
  D) a reduction in productivity.

Question 2

Use the ZZ-Y model presented in chapter 3 to illustrate the effects of a reduction in consumer confidence on the economy. Also, explain what effect this reduction in consumer confidence has on the economy.
 
  What will be an ideal response?

[mcni194]

Answer to Question 1

C

Answer to Question 2

The graph is easy. The reduction in consumer confidence will cause a reduction in consumption and demand. As demand falls, firms will cut production. So, this event will cause a lower level of equilibrium output.

[ishan]

Thank you

[mcni194]

No problemo