Discuss the following statement: “Higher labor productivity allows firms to produce more goods with the same number of workers and thus to sell the goods at the same or even lower prices. That’s why increase in labor productivity can permanently reduce the rate of unemployment without causing inflation.”

Economics (MindTap Course List)
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ISBN:9781337617383
Author:Roger A. Arnold
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Chapter6: Macroeconomic Measurements, Part I: Prices And Unemployment
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  1. Discuss the following statement:

“Higher labor productivity allows firms to produce more goods with the same number of workers and thus to sell the goods at the same or even lower prices. That’s why increase in labor productivity can permanently reduce the rate of unemployment without causing inflation.”

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