Consider the impact of an increase in labor-enhancing technology within the classical model. Provide graphs to illustrate what happens to real wages, labor, output, and the price level
What will be an ideal response?
An increase in labor-enhancing technology will shift the production function upwards, which will increase labor demand and increase the real wage. This will increase the aggregate supply curve, which increases output and reduces the price level.
Economics
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When cyclical unemployment is zero,
A) frictional unemployment is zero. B) cyclical and frictional unemployment are zero. C) structural unemployment is zero. D) the unemployment rate equals the natural unemployment rate. E) the natural unemployment rate is zero.
Economics
The burden of a tax placed on buyers is:
A. shared between buyers and sellers. B. the buyers' incidence. C. the sellers' incidence. D. higher if the tax is placed on buyers.
Economics