Using Figure 2 below, suppose that the economy started at PAE2. A potential change that could cause the economy to go from PAE2 to PAE1 might be:
A. wealth level decreases.
B. interest rates decrease.
C. expected profitability of investments increase.
D. domestic income decreases.
A. wealth level decreases.
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Total income
A) excludes profits. B) includes only wages and interest payments. C) is the yearly amount earned by owners of the nation's resources. D) includes only wages received by workers.
Intraindustry trade can be explained in part by
A) transportation costs within and between countries. B) problems of data aggregation and categorization. C) increasing returns to scale. D) All of the above.
Which of the following is an accurate statement about rationality?
a. Rationality is the same for all people. b. Rationality is subjective. c. Rationality yields mostly satisfying results. d. Rationality uses complex formulas.
The U.S. Department of Labor may underestimate the severity of unemployment for all of the following reasons except
A. discouraged workers are not considered part of the labor force. B. many workers are "underemployed," occupying jobs well below their levels of skills and education. C. surveys of household members are likely to produce a rosier picture of employment circumstances than actually exists. D. Many households earn far less income than they desire. E. part-time workers are grouped among the employed, even though they desire full-time employment.