During the recent recession, several European countries proposed austerity measures that would help shrink the size of the nati
onal deficits within the countries. These proposed measures included tax hikes and cuts in government spending. When this happened in the United States in the 1990s, there was an accompanying decrease in the policy rate to help avoid slowing the economy down too much. Why was this same policy decision more difficult in Europe? A. In response to the recession, the policy rate in Europe had already been lowered close to the zero lower bound, so additional decreases were not viable. B. Europeans protested against the austerity measures, which angered the government; it responded by intentionally not taking steps to limit the impact of these measures. C. There is no mechanism in Europe to change the policy rate like there is in the United States. D. European governments had never implemented these types of austerity policies before so they were not aware of the need for monetary policy to limit the impacts.
In Europe during the recession the policy rate of the banks like LIBOR and EURIBOR etc were already very close to zero so unlike United states of america they were not able to decrease the rate further. The monetary policy of Europian banks and authorities saw a major failure in that period.
Yes. Collective bargaining is negotiation of wages working conditions by an organized group of employees (often called a union). The union representatives meet with the employer/employer's representatives to negotiate terms.
Since the labor is only variable input and the marginal cost of production is diminishing that means the cost of producing additional unit is lower. So marginal product of labor will be increasing.
Moreover, MC = w /MPL
Thus, diminishing marginal cost will exhibit increasing marginal product of labor.
