Labor force productivity has increased from $30 per hour to $32 per hour over the past year. This could result from
A) an increase in real GDP with no change in the aggregate hours or a decrease in aggregate hours with no change in real GDP.
B) only an increase in real GDP.
C) an increase in population.
D) an increase in the labor force participation rate.
E) only a decrease in aggregate hours.
A
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The primary reason why the oversimplified formula overstates the multiplier is that it ignores price-level changes, which reduce the multiplier
a. True b. False Indicate whether the statement is true or false
In Watermala, the marginal propensity to consume is 0.6, base consumption is $1,000 . the tax rate is 30 percent of income, national income is $5,000 . investment spending is $800, government spending is $1,500, export earning is $1,000 . and import spending is $500 . Given this information, Watermala's aggregate expenditure equals _____
a. $5,900 b. $7,800 c. $3,900 d. $10,300