Multiple Choice
People might work more during a war time temporary increase in government purchases because of:
A) a military draft or voluntary enlistment takes away some primary household earners and to maintain consumption as the model predicts, those households may have other members work who did not previously.
B) the increase in the MPL leading to an increase in the demand for labour and increased capital utilization as the model predicts.
C) increased investment leading to hire capital stocks that increase the demand for labour as the model predicts.
D) all of the above.
Correct Answer:
Verified
Correct Answer:
Verified
Q5: A permanent increase in government purchases causes
Q6: According to the market clearing model a
Q7: With a temporary change in government purchases
Q8: The model predicts that a temporary increase
Q9: A temporary increase in government purchases does
Q11: In the market clearing model a permanent
Q12: The government budget constraint is:<br>A)government purchases less
Q13: The model predicts a permanent decrease in
Q14: The real wage increase in the data
Q15: A temporary increase in government purchases does