The labor supply curve will be negatively sloped if the substitution effect of wages is
A. Negative.
B. Stronger than the income effect of wages.
C. Weaker than the income effect of wages.
D. Equal to the income effect of wages.
Answer: C
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What will be an ideal response?
From the perspective of households the uses of income are
A) taxes, saving, consumption of domestically produced and imported goods. B) taxes, investment, consumption of domestically produced and imported goods. C) taxes, saving, consumption, exports, and imports. D) None of the above.
Because of the multiplier effect, ________ changes in government spending or taxation can cause ________ changes in real GDP.
A. small; large B. small; small C. large; small D. large; large
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