The natural rate of output is ________. A) independent of the ...

[Bernana]

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?

[nanny]

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]

Excellent

[billybob123]

Thanks for the timely response, appreciate it