A compensating wage differential is
a. the difference between the wage of an individual working in favorable conditions and the wage of an individual working in unfavorable conditions
b. compensation paid to an individual for working in a less desirable environment
c. premium paid to a security holder to compensate him for bearing a higher risk
d. Only A&B
d
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An example of contractionary fiscal policy would be
a. cutting taxes b. decreasing government spending c. increasing production of consumer goods d. expanding the governments role in regulating private industry
An increase in government expenditures by $100 (unmatched by an increase in taxes) would, if the MPC = 0.90, result in an increase in real GDP by:
a. $1,000. b. $9,000. c. $900. d. $190. e. inadequate information is given.