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

Assume that households have positive wealth. Which of the following explains how the income effect of an interest rate increase affects consumption?

Firms report that their workers are working no overtime. The government reports that the unemployment rate is 13.5%. In this situation, the multiplier is likely to be

If Sammy does not have a full-time job but is working part-time at 4 different jobs, he is counted ________ in the job data, and ________ in the persons-employed data.

A change in tax rates is likely to affect individuals' behavior regarding consumption and saving if

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

Monetary policy is less effective than it was in the past because

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. What is the real wage rate in 2016 using 2014 as the base year?

Productivity fluctuates over the business cycle, tending to fall during expansions and rise during contractions.

Assume that the substitution effect dominates the income effect. When wages fall

Holding everything else constant, the more wealth a household has

Temporary policy changes have a greater effect than permanent ones.

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 the real wage

The ________ in the labor-force participation rate since 1970 is among prime-age women.

Inventory investment is the difference between the level of output and the level of sales.

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. If the economy is currently at Point C, pessimism about future growth in aggregate output moves the economy to Point

If the income effect is ________ the substitution effect, the labor supply curve has a positive slope.

At low levels of output, the economy can expand with little or no increase in the overall price level because

According to the life-cycle theory of consumption, people tend to save during their ________ years.

Employment does not fluctuate as much as output over the business cycle.

The trend of the inventory/sales ratio over time indicates that