Refer to the following figure when answering the following questions.
Figure 15.1: The Labor Market
-Consider Figure 15.1, which is a representation of the labor market. In 2005, Hurricane Katrina hit the Gulf Coast of the United States; this would cause a shift from curve ________ because this is an example of a(n) ________.
A) negative TFP shock
B) increase in TFP
C) increase in the interest rate
D) rise in government expenditure
E) None of these answers is correct.

Question

Refer to the following figure when answering the following questions.
Figure 15.1: The Labor Market 
-Consider Figure 15.1, which is a representation of the labor market. In 2005, Hurricane Katrina hit the Gulf Coast of the United States; this would cause a shift from curve ________ because this is an example of a(n) ________.
A) negative TFP shock 
B) increase in TFP 
C) increase in the interest rate 
D) rise in government expenditure 
E) None of these answers is correct.

Quizplus · Accepted Answer

Hurricane Katrina is a negative shock to total factor productivity (TFP) in the affected region, causing a shift in the labor market from curve 11eab38d_06f5_483e_a5fb_15112c8970f1_TB6622_00.

Refer to the Following Figure When Answering the Following Questions