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Author Question: Equilibrium expenditure occurs when A) real GDP minus net taxes equals disposable income. B) ... (Read 59 times)

altibaby

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on: Jun 29, 2018
Equilibrium expenditure occurs when
 
  A) real GDP minus net taxes equals disposable income.
  B) disposable income equals consumption expenditures plus imports.
  C) disposable income equals real GDP.
  D) aggregate planned expenditure equals real GDP.
  E) real GDP plus net taxes equals disposable income.

Question 2

What factors can lead the real wage rate to be above its full-employment equilibrium level?
 
  What will be an ideal response?


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Dinolord

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Reply #1 on: Jun 29, 2018
Answer to Question 1

D

Answer to Question 2

There are at least three reasons why the real wage rate might be above its equilibrium level. First, firms might pay an efficiency wage, which is a wage rate set above the full-employment equilibrium wage rate in order to induce greater work effort from workers. Second, a minimum wage law might set a minimum wage that is above the full-employment equilibrium wage rate. Finally, a union might negotiate a wage rate that is above the full-employment equilibrium level.


altibaby

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Reply 2 on: Jun 29, 2018
Gracias!

irishcancer18

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Reply 3 on: Yesterday
Excellent

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