Technological innovation shifts upwards the productivity and price setting curves. This always results in a lower equilibrium unemployment rate both immediately and in the longer term. True. In the long run unemployment will fall. False, the outcome depends also on the wage setting process. If unions demand higher wages, then this may shift outwards the wage setting curve, resulting in higher unemployment, at least in the short run.

Technological innovation shifts upwards the productivity and price setting curves. This always results in a lower equilibrium unemployment rate both immediately and in the longer term. True. In the long run unemployment will fall. False, the outcome depends also on the wage setting process. If unions demand higher wages, then this may shift outwards the wage setting curve, resulting in higher unemployment, at least in the short run.

Economics For Today

10th Edition

ISBN:9781337613040

Author:Tucker

Publisher:Tucker

Chapter11: Labor Markets

Section: Chapter Questions

Problem 8SQP

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