In the current period a perceived increase in the real wage, will cause households to:
a. work more.
b. consume less leisure.
c. consume more goods.
d. all of the above.
Answer: d. all of the above.
You might also like to view...
When government spending is equal to the tax revenues during a specific time period, this is known as a
A) government budget deficit. B) government budget surplus. C) balanced budget. D) public debt.
Neoclassical growth theory
A) predicts that growth rates and incomes per person throughout the world will converge. B) predicts that the faster growing underdeveloped nations will overtake and then surpass the industrial nations. C) predicts that nations that enjoy a technological advantage will maintain that advantage. D) makes no predictions about the relative growth or incomes among countries.
Price discrimination is based on self-selection:
A. when a firm can distinguish consumers with a high versus low willingness to pay. B. when a firm offers a menu of alternatives, designed so that different customers will make different choices based on their willingness to pay. C. when a monopolist knows perfectly the customer's willingness to pay for each unit its sells and can charge a different price for each unit. D. when monopolists decide for themselves whether to engage in price discrimination.
If the government accelerates money supply growth and enlarges the budget deficit to stimulate aggregate demand, the rational expectations hypothesis indicates that decision makers will:
a. ignore the policy until it exerts an observable impact on prices, output, and employment. b. quickly take steps to adjust their decision making in light of the more expansionary policies. c. be fooled at the outset but eventually adjust their decision making in accordance with the change in policy. d. be unaware that this policy change has been implemented until a higher rate of inflation is observed.