Mainstream economic theory considers output per unit of person employed (labour productivity) to be counter-cyclical (rises when activity falls and vice versa) - given they think the demand for labour is inversely related to the real wage. That is, they believe that when firms employ more workers productivity drops and so the real wage also have to fall to make it profitable. The real world observation that hours worked are adjusted before persons employed in response to changes in sales volumes means that output per unit of person employed is pro-cyclical which renders the main insights of orthodox labour demand theory inapplicable.
Answer: True
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