The LM Curve will see a shift to the left and decrease the value of "Y" if the IR is higher than the ER of the market. The GDP is increasing in value and there will be an increase of savings.. If the IR was below the equilibrium, the opposite of the previously stated would occur. The LM Curve would see a shift to the right, therefore increasing the value of "Y". The GDP value would then decrease, due to the move from Point A to C, and increase employment which would decrease savings.
If house Prices fall it will cause significant problems for the UK economy. There will be a fall in consumer wealth, and declining house prices can lead to negative equity. (house prices are less than what people bought them for). Therefore, some people will have their home repossessed and will also owe money on their old mortgages. The effects of a fall in consumer wealth will be to reduce confidence and consumer spending; equity withdrawal will slow down sharply – this has been a significant contributor to increasing AD in UK).
In order to combat this deficit spending, taxes are increased to generate more revenue to pay off this spending. In response, consumers will spend less money and save more, thus causing a decrease in consumption and less money in the economy. Soon, there is a decrease in investment because products are not being sold. Prices drop, and the economy lowers into a recession.
D) All of the above. E) None of the above. Answer: ___ 2) As the proportion of labor contracts with wage indexation increases, we would expect that: A) nominal wages will become more sensitive to changes in unemployment. B) a reduction in unemployment will have a smaller effect on inflation. C) the natural rate of unemployment will decrease.
The teams and the organization’s are not the only one’s affected by this. Merchandisers are also affected by the loss of interest in the fans, thus causing diminished sales of merchandise and apparel. The lost interest in fans plays a major role to sponsors of Major League Baseball due to the rapid decline of viewers during televised games. According to Will Van Wazer’s article, “National Pastime No More,” The MLB in the 1970’s and 80’s were the leaders in professional sports with national sponsors. In today’s game they now are second behind the NFL.
d. Prices will decline and interest rates will rise. e. There will be no changes in either prices or interest rates. 2. Which of the following is likely to lead to an increase in the cost of funds? a. Companies’ production opportunities decline, leading to a decline in the demand for funds.
Not wanting to compromise work quality and ethic this option not exercisable. (See appendices 2&3 ranking this option last in financial return on investment) Lawrence Facility places NB in a catchment area to augment its labor shortage with experienced quality workers at a lower wage rate (10%) compared to Everett. This was due to the closure of several local shoe factories and depressed labor market. NB will have local government financial and administrative Aid to ameliorate the cost of opening the facility. Overall operating cost would be lower due to the lower wage bill while overhead and operating cost would be about the same as Everett.
If the price is allowed to adjust to equilibrium the equilibrium quantity of bonnets supplied will be greater than 1500. Which of the following factors is definitely not associated with this change? Correct: Profits in the bonnet industry will decrease. ------------------------------------------------------------------- Question 6 Questions 6 and 7 refer to the figure below. The U.S. would import rubber chickens if the world price was Correct: below $20.
It could therefore be said that an increase in the incomes of consumers could cause the bus operators revenue to decrease due to a fall in demand. This would indicate that the bus driver should close the service. Price elasticity of supply measures the proportionate response to changes in quantity supplied to a proportionate price change. A price elasticity of supply value of +1.15 means that the bus service has a more than proportionate response in supply to a change in price. The positive sign basically shows that higher prices will
Factories usually do this to decrease the cost of labor. Another example, when the interest rate on loans decreases, companies would focus on capital intensive than labor intensive activities. In both cases, the demand for labor decreases. What are the new equilibrium wage rate and employment level? Equilibrium wage rate and employment level goes down.