A decrease in consumer wealth will
A) not change autonomous consumption and rotate the consumption function upward.
B) decrease autonomous consumption and shift the consumption function downward.
C) not change autonomous consumption and rotate the consumption function downward.
D) increase autonomous consumption and shift the consumption function upward.
B
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Auto workers negotiate a wage increase. How does this wage hike affect the supply of cars?
A) It decreases the supply. B) It increase the supply. C) It has no effect. D) There is not enough information to tell if the change increases, decreases, or has no effect on the supply of cars.
Starting from short-run equilibrium, the following occurs: personal income taxes are cut, business taxes are cut, and labor productivity rises. What is the effect on the price level and Real GDP in the short run?
A) Real GDP rises and the price level necessarily falls. B) Real GDP rises and the price level necessarily rises. C) Real GDP falls and the price level necessarily remains the same. D) Real GDP rises and the effect on the price level cannot be determined. E) Real GDP rises and the price level necessarily remains the same.