Exam 30: Household and Firm Behavior in the Macroeconomy: a Further Look

The real wage rate measures the amount that wages can buy in current dollars.

Firms report that their workers are working six hours of overtime per week. The government reports that the unemployment rate is 3.5%. In this situation, the multiplier is likely to be

Which of the following is an example of nonlabor income?

The quantity of labor supplied by households depends on factors such as the wage rate, prices, wealth, and nonlabor income.

An unexpected ________ in inventories has ________ effect on future production.

Refer to the information provided in Table 30.1 below to answer the question(s) that follow. Table 30.1 -Refer to Table 30.1. From 2014 to 2016 nominal wages

________ reaches its peak about 9-12 months after a spending increase began.

Which of the following causes an individual to increase his/her supply of labor?

The idea of the life-cycle theory of consumption is that people make lifetime consumption plans.

Permanent income is

As the economy expands, the labor force ________, and as the economy contracts, the labor force ________.

If firms believe that a downturn in sales and output is temporary and that increased output will be needed in the future, they may choose to

Firms have inventories that they can draw down to meet an increase in demand. This will

Over time, spending on ________ is "smoother" than spending on ________.

The average level of one's ________ income stream is permanent income.

If the unemployment rate is 13%, then the employment rate is

An increase in wealth will usually cause an individual to ________ his supply of labor.

An increase in dividend payments will

Empirical evidence with respect to the labor supply decision suggests that

Purchases of ________ are the most volatile type of expenditures because they are very sensitive to the interest rate, which is highly volatile.