Use the following consumption schedule to answer the next question. At income level 3, the amount of saving is represented by the line segment

Which of the following is likely to happen, if consumption in an economy falls?

A) Asset prices rise. B) Household bankruptcies rise. C) Labor supply falls. D) Mortgage defaults fall.

Which of the following will lead to an increase in the firm's short-run demand for labor?

A) a decrease in the price of the final product B) an increase in price of the final product's substitute good C) an improvement in labor productivity D) a decrease in the number of buyers for the final product