Author Question: If the substitution effect is stronger than the income effect, an increase in real interest rates ... (Read 102 times)

123654777 · **on:** Jun 30, 2018

If the substitution effect is stronger than the income effect, an increase in real interest rates will lead to ________ in aggregate consumption and will lead to ________ in household saving.

A) an increase; a decrease
B) a decrease; a decrease
C) a decrease; an increase
D) an increase; an unclear change

Question 2

The marginal product of labor (MPL) is given by the ________.

A) labor share of income + average output per unit of labor
B) labor share of income - average output per unit of labor
C) labor share of income average output per unit of labor
D) labor share of income average output per unit of labor
E) none of the above