The increase in spending that occurs because the real value of money increases when the price level falls is known as the:
A. interest rate effect.
B. international trade effect.
C. price effect.
D. wealth effect.
Answer: D
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In the simple Keynesian model of the determination of income, the price level is assumed to be
A) exogenous and to gradually change. B) endogenous and to gradually change. C) exogenous and to remain constant. D) endogenous and to remain constant.
Which of the following statements is not correct?
a. The percentage of the population that suffers from long-term poverty is far smaller than the percentage of the population that suffers from short-term poverty because there is a high level of economic mobility in the United States. b. Permanent income is a better measure of a family's ability to buy the necessities of life than is transitory income. c. The economic life cycle theory explains why gifts of goods and services reduce poverty for the very young and the very old. d. Because people can borrow and save to smooth out changes in income, their standard of living in any one year depends more on lifetime income than on a particular year's income.
Increased levels of consumption:
a) Shift aggregate supply outwards so more is supplied at each price b) Shift aggregate supply inwards so less is supplied at each price c) Shift aggregate demand outwards so more is demanded at each price d) Shift aggregate demand inwards so less is demanded at each price
Chelsea was a manager at a vinyl records store who recently quit because she felt the recent popularity of vinyl is a current fad that will eventually fade away. She is now actively looking for a job in the hospitality industry. Chelsea is considered:
A) Frictionally Unemployed B) Cyclically Unemployed C) Structurally Unemployed D) Not in the labor force