An unanticipated decline in investment demand within the new classical model will cause
a. the price level to fall with no effect on output.
b. output to fall with no effect on the price level.
c. both the price level and output to fall.
d. no change in either the level of price or output.
C
Economics
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If there are powerful unions in a labor market, the use of the supply-and-demand model to analyze labor markets
A. is inappropriate. B. will cause you to believe the wage will be lower than it is. C. will cause you to believe that fewer people will be hired than will be. D. is completely accurate.
Economics
If an economy's MPC is 0.8 and the MPM is 0.05, then an increase in government spending of $2,000 will increase income by
A. $5,500. B. $8,000. C. $10,000. D. $20,000.
Economics