Which of the following will happen if consumption in an economy falls?
A) Firms' revenue fall. B) Labor supply falls.
C) Mortgage defaults fall. D) Asset prices rise.
A
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If the cost of hiring workers increases but the marginal benefit remains unchanged, employers are likely to respond by hiring ________ at any given wage
A) more workers B) immigrant workers C) fewer workers D) teenaged workers
Political forces:
A. affect the price mechanism through cultural norms. B. affect the price mechanism through scarcity. C. do not affect the price mechanism. D. affect the price mechanism through the legal system.
Suppose that the economy is currently below its long-run equilibrium output. Which of the following is an example of monetary policy that can help put the economy back toward equilibrium?
A) Increasing the money supply to reduce interest rates to encourage more spending and investment. B) Raising income taxes to help pay off government debt. C) Reducing the money supply to push interest rates higher to encourage more savings. D) Decreasing income taxes to encourage more spending and investment.
If disposable income is $900 billion when the average propensity to consume is 0.8, it can be concluded that:
a. Consumption is $800 billion b. The marginal propensity to save is 0.1 c. The marginal propensity to consume is 0.9 d. Saving is $180 billion