How Would Each of the Following Events Affect the Level

question 11

Essay

How would each of the following events affect the level of employment and the real wage rate?
a.A tremendous boom occurs in the stock market,increasing people's wealth by $100 billion overnight.
b.A major government loan-guarantee program goes bust,losing $500 billion.To pay off the loss,the government announced that tax rates will rise 30% in the future.
c.A nuclear mishap contaminates all auto plants in the Windsor area,destroying their capital.
d.Medical science cures the common cold,causing fewer work days lost to illness,thus greatly increasing labour productivity.

---

Definitions:

Specified Percentage

A particular proportion or share expressed as a fraction of 100, often relating to financial or operational metrics.

Net Income

The total profit of a business after all expenses and taxes have been subtracted from total revenue.

Consumer Credit

A financial arrangement that allows individuals to purchase goods or services now and pay for them in the future.

Trade Credit

A form of credit extended by suppliers to their customers, allowing them to purchase goods or services and pay for them at a later date.