If the demand for a product is elastic, the quantity demanded changes by a smaller percentage than the percentage change in price

Over the last decade, a country experiences a significant increase in labor productivity

a. Draw and label a labor market supply and demand diagram. Show how the equilibrium real wage rate and the equilibrium quantity of labor change as productivity increases. b. Draw and label a production function. Show how potential GDP changes as labor productivity increases.

Keynesians believe in

a. active management of structural deficits an minimal cyclical deficits. b. running structural budget deficits to stimulate output c. running large surpluses during expansions. d. active management of cyclical deficits and minimal structural deficits. e. both c and d.