If a large decrease in rent leads to a firm cutting back on the labor it uses,
A. the output effect outweighs the substitution effect.
B. the substitution effect outweighs the output effect.
C. the substitution and output effects are equal.
D. there is no way of determining the relative strengths of the output and substitution effects.
B. the substitution effect outweighs the output effect.
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The Bureau of Labor Statistics does not count discouraged workers as unemployed. Suppose discouraged workers were counted as unemployed. Explain how the unemployment rate and the labor force participation rate would change
What will be an ideal response?
Dissaving occurs when
A) disposable income exceeds consumption. B) disposable income is less than consumption. C) the marginal propensity to save is less than .5. D) the marginal propensity to consume is less than .5.