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3. We study the effects of changes in labor productivity on the labor market in the long run in the context of the Mortensen-Pissarides model. For simplicity, unemployment benefits are set to $b=0$. In the long run, wages and recruiting costs are proportional to labor productivity: $w = eta y$ and $k = cy$ where $b$ and $c$ are two positive real numbers. Equilibrium market tightness with $y$ and the unemployment rate with $y$. a. Does not vary; does not vary b. Increases; Decreases c. Decreases; Increases d. Increases; Does not vary with e. Does not vary; Increases

          3. We study the effects of changes in labor productivity on the labor market in the long run in the context of the Mortensen-Pissarides model. For simplicity, unemployment benefits are set to $b=0$. In the long run, wages and recruiting costs are proportional to labor productivity: $w = eta y$ and $k = cy$ where $b$ and $c$ are two positive real numbers. Equilibrium market tightness ______ with $y$ and the unemployment rate ______ with $y$.
a. Does not vary; does not vary
b. Increases; Decreases
c. Decreases; Increases
d. Increases; Does not vary with
e. Does not vary; Increases

3. We study the effects of changes in labor productivity on the labor market in the long run in the context of the Mortensen-Pissarides model. For simplicity, unemployment benefits are set to b=0. In the long run, wages and recruiting costs are proportional to labor productivity: w = eta y and k = cy where b and c are two positive real numbers. Equilibrium market tightness with y and the unemployment rate with y.
a. Does not vary; does not vary
b. Increases; Decreases
c. Decreases; Increases
d. Increases; Does not vary with
e. Does not vary; Increases

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