For this question, assume productivity has been increasing by 5 per year. Also assume that workers' expectations of productivity growth adjust slowly over time. For this economy, a reduction in productivity growth from 5 to 2 will most likely cause which of the following to occur?
A) an increase in the natural rate of unemployment
B) a reduction in the real wage
C) an increase in the markup over labor costs
D) all of the above
E) none of the above
Question 2
Suppose the consumption equation is represented by the following: C = 250 + .75YD, then private savings is
A) -250+0.25YD.
B) -250+0.75YD.
C) -1000+0.25YD.
D) -1000+0.75YD.
