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

Todd's nominal wage increased by 5%, and the prices of goods that Todd buys increased by 3%. Todd's real wage has

The government spending multiplier is likely to be ________ during periods of low output and high unemployment.

Provided that firms have sufficient capital and labor to support an output increase, monetary and fiscal policy are likely to be the most effective when

Output is likely to respond more to sales increases in high-output periods than in low-output periods, provided that firms have enough capital and labor to support the output increase.

The difference between the stock of inventories at the end of a specific period and the stock at the beginning of that period is equal to

Productivity tends to

If a firm's sales turn out to be more than expected, inventories will be

A firm that had no costs other than inventory costs will always aim to produce in a period the volume of goods necessary to make its stock of inventories at the end of the period equal to

Output per worker hour is known as

Refer to the information provided in Figure 30.1 below to answer the question(s) that follow. Figure 30.1 -Refer to Figure 30.1. Suppose the economy is currently at Point B. If investors are ________ in aggregate output, investment moves the economy to I₂.

Related to the Economics in Practice on p. 607: The Case-Shiller index of housing prices measures the change in price of

The government spending multiplier is likely to be smaller during periods of

To describe the feelings of investors, the phrase "animal spirits" of entrepreneurs was coined by

According to the life-cycle theory of consumption, people tend to consume ________ they earn during their early and later years.

The decline in the measured unemployment rate that results when people who want to work, but who cannot find work, drop out of the ranks of the unemployed and the labor force is the

Suppose that output in an economy is 1,000 units and the number of hours worked in the economy is 40. If the economy enters a recession, which of the following combinations of output and hours worked would best reflect the recession?

If the economy has no automatic stabilizers built in, the multiplier will

When your income decreases, which of the following items are you likely to postpone buying first?

The path of consumption over a lifetime is likely to be ________ the path of income.

The slippage between output and the unemployment rate occurs because the unemployment rate is calculated from data on