Should this firm be concerned if macroeconomic forecasters predict a recession? Explain
What will be an ideal response?
Based on income elasticity from this equation (0.1), no. The good is income inelastic, so a recession should not cause a significant decrease in sales. Note also that income is not statistically significant in this equation, making it even less of a concern.
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The labor force includes all of the following individuals who are 16 years or older EXCEPT
A) people who have never been in the labor force but have just found a job. B) people who are retired and not actively seeking work. C) the unemployed. D) the employed.
When we use ordinary least squares to determine the relationship between changes in consumption and changes in both current and lagged income, we find that
A) only current income influences current consumption. B) current income has no impact on current consumption. C) consumption is not affected by income in any quarter. D) current income, last quarter's income, and income two quarter's ago all have the same impact on current consumption. E) current income has a greater impact on consumption than income lagged one quarter.