Principles of Macroeconomics
6th Edition
ISBN: 9780073518992
Author: Robert H. Frank, Ben Bernanke Professor, Kate Antonovics, Ori Heffetz
Publisher: McGraw-Hill Education
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Chapter 6, Problem 1RQ
To determine
Discuss the five important labor market trends and its effect on labor productivity.
Expert Solution & Answer
Explanation of Solution
There are five important trends in labor market. These are classified into two groups as trends in real wages and trends in employment and
- Extensive growth in real wage rate over the twentieth century.
- Decreasing trend in real wage rate since the early 1970.
- An increase in wage inequality in U.S.
- Decreasing trend in the rapid employment growth in past 50 years.
- High rates of unemployment in European countries during the past three decades.
Among these trends, the first three come under the category of trends in real wage and the remaining two comes under the category of trends in employment and unemployment. Extensive growth in real wage represents an increase in labor productivity and as a result, the
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Chapter 6 Solutions
Principles of Macroeconomics
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