The sum of the components of aggregate expenditure that vary with real GDP is called
What will be an ideal response?
induced expenditures
You might also like to view...
When a government imposes a tariff on imported beer, cooperative surplus ________ and society gets ________
A) increases; richer B) increases; poorer C) decreases; richer D) decreases; poorer
There are asymmetric incentives to support and to oppose protectionist trade policies, with the stronger incentives going to those that would seek protection
Indicate whether the statement is true or false
Consider Jen, a consumer with preferences U(H,F) = F1/3H2/3, where H is the quantity of housing and F is the quantity of food (per month)
Suppose Jen has a stipend of $600/month which she uses to purchase food at a price of $1/unit and housing at a price of $10/unit. a. Compute Jen's utility-maximizing bundle of goods. b. Suppose that Jen's employer subsidizes housing by paying 50% of her total housing costs, thereby effectively lowering the price Jen pays for housing to $5/unit. Compute Jen's new optimal consumption bundle. c. How much does Jen's employer pay in total for this subsidy? How much utility does Jen enjoy with this subsidy (compute her utility at the optimal bundle). d. Suppose that her employer simply gave Jen the dollar cost you found in (c) as a lump sum (instead of subsidizing housing). Will Jen gain a higher utility from the housing subsidy or the lump-sum equivalent transfer?
In Figure 30.2, the equilibrium wage rate is
A. $20 per hour. B. $12 per hour. C. $24 per hour. D. $16 per hour.