1. Business
  2. Economics
  3. 7 suppose a shock hits the economy that abides by...

Question: 7 suppose a shock hits the economy that abides by...

Question details

7. Suppose a shock hits the economy that abides by a Classical model and you observe the following changes: . Overall output increases . Marginal productivity of workers decrease Which of the following could lead to these observations? A. Flood in Minnesota, which destroyed the production facility. B Invention of personal computers C. A huge lake was drained and new fertile land was revealed D. Immigrants get working visas and join the labor force. 8. Consider the labor demand curve from the classical model and the following statements 1. An increase in technology shifts labor demand up 2. An increase in capital shifts labor demand up 3. An increase in the labor supply shifts labor demand down V ten unit change in capital has a larger impact than a ten unit change in technology when it comes to the labor demand curve Which of the choices below is correct? A. All of the above statements are true B. Statements 1, 2, and 3 are true C. Statements 1, 2, and 4 are true D: Statements 1 and 2 are true

Solution by an expert tutor
Blurred Solution
This question has been solved
Subscribe to see this solution