According to the Keynesian consumption function, an increase in disposable income will result in
A) a decrease in consumption.
B) an increase in consumption.
C) a decrease in investment.
D) an increase in investment.
B
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Which of the following correctly describes a wage-price spiral?
a. An increase in nominal wages causes inflation, and inflation causes workers to demand even higher wages in order to keep their real income constant. This cycle can repeat itself. b. An increase in real wages due to growth in workers' productivity causes inflation, which in turn increases workers' productivity. c. A decrease in prices causes workers to demand higher wages, which in turn puts additional downward pressure on prices. d. An increase in the price level lowers real wages leading to unemployment. This in turn puts downward pressure on prices.
If aggregate planned expenditures exceed real GDP, then
A) inventories increase above their planned levels and businesses decrease their production. B) inventories decrease below their planned levels and businesses decrease their production. C) there is no equilibrium level of real GDP. D) unplanned inventory changes equal zero. E) inventories decrease below their planned levels and businesses increase their production.
Compared to workers in poor countries, workers in richer countries have
a. lower productivity but higher wages. b. higher productivity and higher wages. c. higher productivity but lower wages. d. the same productivity but higher wages.
The welfare rolls in the United States shot up most dramatically during the period
A. 1945-1949. B. 1960-1964. C. 1980-1984. D. 1990-1994.