According to the model a permanent decrease in government purchases does not increase the real wage according to the market clearing model because:
A) labour supply and labour demand decrease about the same amount.
B) labour supply is fixed.
C) labour demand is downward sloping.
D) neither labour demand nor labour supply shift due to the permanent increase in government purchases.
Correct Answer:
Verified
Q38: In the market clearing model a permanent
Q39: In the market clearing model the intertemporal
Q40: According to the market clearing model a
Q41: What has been the US experience in
Q42: With a temporary change in government purchases
Q44: What is the government's budget constraint without
Q45: A temporary increase in government purchases does
Q46: A temporary decrease in government purchases does
Q47: According to the model a permanent decrease
Q48: How does government without borrowing affect the
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents