How are total output and total income related to each other, and why?
What will be an ideal response?
The value of total output must equal the value of total income. This is demonstrated by the circular flow. In a closed economy, the income earned by households, businesses, and government is spent in the marketplace in the form of consumption, investment, and government expenditure. This spending creates additional GDP, and the circular flow continues.
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Featherbedding allows unions to increase wages by:
a. limiting the supply of labor. b. increasing firms' demand for labor. c. forcing firms to accept higher-than-equilibrium wages. d. reducing labor share of payroll taxes.
Anything that reduces resource availability or increases the prices of resources would shift the aggregate supply curve inward to the left
Indicate whether the statement is true or false