(output supply curve): A positive relationship between the quantity of output supplied by firms and the real interest rate

CHOOSE THE RIGHT OPTION IN THE BRACKETS IN THE BOTTOM PARAGRAPH

Determine how the following will affect the slope of the

output supply curve, and explain your results.

a. The marginal product of labour decreases at a faster rate as (THE OUTPUT DEMAND CURVE, THE OUTPUT SUPPLY CURVE, THE SUPPLY CURVE FOR CURRENT LABOUR, OR THE DEMAND CURVE FOR CURRENT LABOUR). Therefore, if the marginal product of labour decreases at a faster rate, (THE OUTPUT DEMAND CURVE, THE OUTPUT SUPPLY CURVE, THE SUPPLY CURVE FOR CURRENT LABOUR, OR THE DEMAND CURVE FOR CURRENT LABOUR) will also decrease at a faster rate. As a result, equilibrium level of employment will be (BE UNAFFECTED BY, LESS RESPONSIVE TO, OR MORE RESPONSIVE TO) changes in the real interest rate and the slope of the output supply curve will (INCREASE, DECREASE, OR REMAIN UNCHANGED).