Use the concept of intertemporal substitution to explain how, in real business cycle models, a change in potential output causes an immediate change in actual output
What will be an ideal response?
A productivity shock shifts the production function. At the prevailing levels of input use, output rises or falls, accordingly. Output changes further, as input suppliers adjust to changes in the marginal products of labor and capital. Specifically, an increase (decrease) in the marginal product of an input causes an increase (decrease) in factor payment. In response, the quantities of labor and capital supplied increase (decrease).
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IBM went to the trouble of adding five separate microchips to its F-series printers to slow them down and sell them as E-series printers for a lower price
How could any firm justify adding extra costs to production for a good that will carry a lower price tag?
A strikebreaker is
A) a temporary worker hired by a company to replace a union member who is striking. B) when the President imposes a cooling-off period. C) someone who engages in featherbedding. D) a secondary boycott.