Does the recent increase in trend rate productivity experienced in the U.S. mean that the business cycle is dead?
What will be an ideal response?
No. The basic idea is that the trend line of economic growth is steeper for the recent increase in trend rate productivity. Nevertheless, it can still experience recession, which means that real output can fall below the now steeper trend line for a period of time.
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A monopolistically competitive firm will:
a. maximize profits by producing where MR = MC. b. not likely earn an economic profit in the long run. c. shut down if price is less than average variable cost. d. all of these.
Efficiency wages
a. increase frictional unemployment by keeping wages above equilibrium. b. decrease frictional unemployment by keeping wages at equilibrium. c. increase structural unemployment by keeping wages above equilibrium. d. decrease structural unemployment by keeping wages at equilibrium.