Increase in productivity ---> Increase in unemployment (1 Viewer)

[Freaky]

Could the opposite be true aswell?

IE: Increase in productivity ---> Decrease in price --> Large increase in aggregate demand (assuming the good is elastic) --> The employer having to hire more workers to keep up with the demand --> a reduction in unemployment?

Yey or ney?

 

[word.]

yes that's why microeconomic reform causes short term structural unemployment but will give rise to increasing economic growth hence reducing unemployment in the longer term

 

[Haku]

but the unemployed as resource would flow to other developing areas of production, and be sacked again right after improved efficiency.

lol, our future prospect is like that... :angry:

 

[know_it_all]

productivity is double edged
if its low, biz may substitute capital for labour creating unemp
however if it is high, biz may decrease their labour usage as they can produce greater output with less workers

 

[mattchan]

yeah, kinda sucks for workers. But it is hoped increased productivity will increase output and thus require more labour to satisfy increase in aggregate demand

 

[kouklitsa]

on the topic of productivity.. does anyone have any recent labour productivity stats? and MFP stats??

 

[Freaky]

^Yup

2... and.. 4.5

*nods*

 

[kouklitsa]

^Yup

2... and.. 4.5

*nods*

thanks.. MFP sounds a bit high though.. it only ever increased to like 3.5 and that was when there was heaps of gains from MER :S bahh who knows anymore

 

[Freaky]

hahaha
im just playen dude! I hope u get this response and dont write those figures in the exam tomorrow :S :S :S

My bad!! I just chose 2 totally random numbers, i cant believe they actually fit the description of what you were looking for. lol!!

 

[kouklitsa]

hahaha
im just playen dude! I hope u get this response and dont write those figures in the exam tomorrow :S :S :S

My bad!! I just chose 2 totally random numbers, i cant believe they actually fit the description of what you were looking for. lol!!

haha i knew they werent right anyway lol!! as i said.. 4.5 is extremely high..

 

[screem41]

As long as you use the words "facilitate" and "aggregrate" a few times, it should be fine