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Author Question: The natural rate of output is ________. A) independent of the inflation rate B) always lower ... (Read 122 times)

Bernana

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on: Jun 30, 2018
The natural rate of output is ________.
 
  A) independent of the inflation rate
  B) always lower than potential output
  C) unrelated to the natural rate of unemployment
  D) all of the above
  E) none of the above

Question 2

Is there a positive or negative relationship between real wages and output in the classical model? Explain.
 
  What will be an ideal response?


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nanny

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Reply #1 on: Jun 30, 2018
Answer to Question 1

A

Answer to Question 2

The answer depends upon whether labor supply or labor demand is shifting. If an increase in output is caused by an increase in labor supply, then there is a negative relationship between real wages and output. If an increase in labor demand causes the increase in output, then real wages and output are positively related.


Bernana

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Reply 2 on: Jun 30, 2018
Thanks for the timely response, appreciate it

kishoreddi

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Reply 3 on: Yesterday
Wow, this really help

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