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

At the beginning of 2017, the Absorbo Company has 10,000 sponges in stock. During 2017, the company produces 200,000 sponges and sells 160,000 sponges. The Absorbo Company's stock of inventory at the end of 2017 is ________ sponges.

According to the life-cycle theory of consumption, people tend to consume more than they earn during their early working years.

The ________ refers to the amount a household actually works within a given period at the current wage rate.

The phrase that was coined by John Maynard Keynes to describe the feelings of investors was the ________ of entrepreneurs.

The portion of a corporation's ________ that the firm pays out each period to shareholders is known as dividends.

An unexpected increase in nonlabor income will have ________ effect on a household's leisure.

If a policy maker wants to change taxes to encourage individuals to increase their labor supply, the policy maker should

Productivity fluctuates along a business cycle because

Which of the following is not true of a change in dividend payments?

Refer to the information provided in Figure 30.2 below to answer the question(s) that follow. Figure 30.2 -Refer to Figure 30.2. Labor productivity at time t₂ is

Firms have no inventories that they can draw down to meet an increase in demand. This will

Generally speaking, wealth starts out negative, turns positive, then approaches zero near the end of life.

An unexpected increase in wealth or nonlabor income leads to

The ________ refers to the amount a household would like to work within a given period at the current wage rate if it could find the work.

Productivity tends to

The Unique Toy Company rents space by the square foot in a warehouse to store its inventory. The owner of the warehouse just doubled the rent he charges the Unique Toy Company. Everything else equal, the rent increase is likely to ________ Unique's optimal level of inventory.

Assume that the substitution effect dominates the income effect. When the government raises tax rates, after-tax real wage rates

Generally speaking, investment does ________ when aggregate output does ________.

Empirical data suggest that during recessions, individuals reduce more of their consumption of

Suppose that input prices respond very slowly to output price. This will