Economics

In the classical model, an increase in aggregate demand will lead to a

In the classical model, an increase in aggregate demand will lead to an increase in wage rates while a decrease in aggregate demand will A) change the price of capital. B) leave wages unchanged since workers will not take a cut in pay. C) increase wages since business will be desperate for labor. D) decrease […]

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Date: September 2nd, 2020

According to the permanent income hypothesis, a temporary increase in

According to the permanent income hypothesis, a temporary increase in income that does not affect average lifetime income would A) cause no change in consumption. B) cause a decrease in consumption and saving by the same amount. C) cause an increase in consumption and saving by the same amount. D) cause a large increase in […]

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Date: September 2nd, 2020

The interest rate effect suggests that A) an increase in the price le

The interest rate effect suggests that A) an increase in the price level decreases the interest rate, which causes businesses and consumers to reduce desired spending. B) an increase in the price level increases the interest rate, which causes businesses and consumers to reduce desired spending. C) an increase in the price level increases the […]

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Date: September 2nd, 2020

Which of the following best describes the difference between a demand

Which of the following best describes the difference between a demand curve and a demand schedule? A) A demand curve shows different quantities of a good demanded at different prices, whereas a demand schedule shows different quantities of a good demanded at different incomes. B) A demand curve can be derived from a demand schedule, […]

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Date: September 2nd, 2020