
a)
The validity of the statement that the ideology of technical progress leading to solid increases in employment is supported by the changes in employment as well as per capita output in the US after 1900.
a)

Answer to Problem 1QAP
True
Explanation of Solution
Economic information of the US economy since the beginning of the 20th century provides enough evidence as to how technological progress has increased the level of employment. During such time, the per capita output of the nation has increased by a good 7 times. At the same reference period, the employment level has also risen 5 times. As this proves technological progress to be enhancing employment, the statement could be considered as false.
Introduction:Technical progress in any country is said to be enhancing employment levels. Since the beginning of the 20th century, many technical advancements have taken place worldwide, reshaping the economies all over.
b)
The validity of the statement that creative destruction would be equally benefited by workers.
b)

Answer to Problem 1QAP
False
Explanation of Solution
It cannot be said that all workers receive equal benefits via the process of creative destruction. For example, blacksmiths lost their profession due to creative destruction. Although some professions benefitted immensely through this, some had to immensely suffer on the other hand. Hence, the statement could be considered as false.
Introduction:Creative destruction could be defined as the process that demolished the conventional professions or ways and means of doing certain professions. They were replaced with the so called innovative methods. It is subject to debate as to how acceptable this process is.
c)
The validity of the statement that the real wage levels of workers with low skills have declined as compared against that of high skilled workers in the US across the past two decades.
c)

Answer to Problem 1QAP
True
Explanation of Solution
The statement could be considered as true as there had been declines in the real wage levels of low skilled workers in the US. On the contrary, real wages of skilled workers have shown an increase. The said changes in two opposite directions have been instrumental in widening the gap of real wages between high and low skilled workers.
Introduction:Real wage is an important concept that is widely spoken of in economics. It is the actual
d)
The validity of the statement that technological progress creates a decline in employment only if the output increase is below the productivity increase.
d)

Answer to Problem 1QAP
True
Explanation of Solution
The statement could be considered as true as technological progress in deed reduces employment under the condition that the increase in the level of productivity is beyond the increase in the output level. As workers would be paid wages that are in line with their productivity levels, there would be an increase in real wages. If the increase in real wages exceed the increase in the level of output, there would be
Introduction:Technological progress in general is considered to be reducing the level of unemployment. As these concepts are much important in economic analysis, it is worthwhile looking into the relevant conditions under which this would be so.
e)
The validity of the statement that the reduced level of natural unemployment that occurred during the latter half of the 1990’s is possible to be explained by the unexpectedly high productivity
e)

Answer to Problem 1QAP
False
Explanation of Solution
The statement could be considered to be false. As stated above, an unusual increase in the level of
Introduction:It is said that an unusually high growth rate in the aggregate output has been the reason as to why the natural rate of unemployment has declined in the second half of the 20th century in the economy of the US.
f)
The validity of the statement that if technological progress could be stopped, the natural rate of unemployment would decline as a result.
f)

Answer to Problem 1QAP
False
Explanation of Solution
The statement could be considered as false. A technological progress cannot bring down the level of natural unemployment. However, there would be possible changes in natural unemployment that has been caused by features such as higher savings. Nevertheless, technological progress being the driver of growth in the long run, the economy is more likely to be stagnant. This, in turn shall make natural unemployment constant or decrease depending on the population’s growth rate.
Introduction:Natural rate of unemployment refers to the percentage of unemployment resulting from the structural features of an economy. In other words, it is the minimum level of unemployment an economy could have.
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Chapter 13 Solutions
Macroeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
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