Question
A temporary adverse productivity shock would: A) shift the FE line to the right and leave...
A temporary adverse productivity shock would:
A) shift the FE line to the right and leave the IS curve unchanged
B) shift the FE line to the left and leave the IS curve unchanged
C) shift the FE line to the left and the IS curve up
D) have no effect on the FE line
please explain!
Answers
A temporary the advense productivity Shock would decrease Level of employment. so it shifts the "Full line (or) FE line towards Left Employment" line cor) Full Vertical line at the Full employment FE line e a The Level of output - FEA FEL 1 Lm. A=B March С C rec IS Y у Investment have The Ceerves will IS no effect + on tem So i will so sarings poreary advense productively Shocu. remain unchanged. . option B "shift the FE line to the Left 야 and help theo leave the unchan anged" is correct correct ophion, ( (manuyon) IS ceereve
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