In the Market Clearing Model a Permanent Increase in Government

question 18

Multiple Choice

In the market clearing model a permanent increase in government purchases does not increase the real wage because:

• A)labour supply and labour demand increase 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.

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Definitions:

Available-for-sale

A classification of financial assets indicating they can be sold in the future, not held to maturity or for trading immediately.

Derecognition

The removal of an asset or liability from a company's balance sheet when it is no longer controlled or owes it.

Financial Assets

Assets that are cash, an equity instrument of another entity, a contractual right to receive cash or another financial asset, or a contract that will or may be settled in the entity's own equity instruments.

AASB 101

The Australian Accounting Standards Board statement that outlines the presentation of financial statements.