Question 1
When output increases by 1%, the unemployment rate ________ in the short run because as output increases, the size of the labor force increases.
◦ tends to rise by 1%
◦ tends to fall by 1%
◦ does not tend to fall by 1%
◦ tends to rise by less than 1%
Question 2
Productivity fluctuates over the business cycle, tending to fall during expansions and rise during contractions.
◦ true
◦ false