+ 3. Output, total hours worked, and average labor productivity all are procyclical.

a. Which variable, output or total hours worked, increases by a larger percentage in expansions and falls by a larger percentage in recessions? (Hint: Average labor productivity output

=

total hours worked, so that the

÷

percentage change in average labor productivity equals the percentage change in output minus the percentage change in total hours worked.)

b. How is the procyclical behavior of average labor productivity related to Okun’s law, discussed in Chapter 3 ?

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