Transfer payments
A. fall during recessionary periods.
B. buffer aggregate demand during downturns because disposable income and hence, consumption, do not fall as fast as GDP.
C. are exclusively a discretionary stabilizer.
D. are progressive and prevent income from rising as fast as output.
B. buffer aggregate demand during downturns because disposable income and hence, consumption, do not fall as fast as GDP.
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As disposable income increases, consumption
A. decreases. B. may either increase or decrease depending on the MPC. C. increases. D. may either increase or decrease depending on the wealth effect.
Few countries have a higher GDP per capita than the weighted average of Canada, Mexico and the U.S
Indicate whether the statement is true or false
The wage premium for the average college graduate (vs. the average high school graduate) has gone down significantly in recent years
a. True b. False
In the short run when the marginal product of labor ________, the marginal cost of an additional unit of output ________.
A. rises; rises B. falls; falls C. falls; rises D. rises; doesn't change