Exhibit 11-10 How Low Would the Wage Rate Have

question 47

Multiple Choice

Exhibit 11-10 How low would the wage rate have to fall before the firm in Exhibit 11-9 would hire nine workers?

• A)$198
• B)$4
• C)$396
• D)$28
• E)The firm would have to be paid to hire nine workers.

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Definitions:

Terrible Depression

An extremely severe and prolonged downturn in economic activity, characterized by significant declines in GDP, employment, and production.

APC

Average Propensity to Consume, indicating the percentage of income that an individual or average consumer spends rather than saves.

Disposable Income

The total amount of money available for an individual or household to spend or save after taxes have been deducted.

Consumption

The use of goods and services by households, constituting one of the major components of GDP.