How Would Each of the Following Events Affect the Level

question 68

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 announces that tax rates will rise 30% in the future.
(c)A nuclear mishap contaminates all auto plants in the Detroit area,destroying their capital.
(d)Medical science cures the common cold,causing fewer work days lost due to illness,thus greatly increasing labor productivity.

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Definitions:

Women

Female human beings, with discussions often focusing on their social, political, and economic rights and status.

Welfare Reform Act

Legislation aimed at changing the welfare system by encouraging work and reducing dependency on government benefits.

Social Security Act

A law enacted in 1935 to create a system of transfer payments in which younger, working people support older, retired people.

Poverty

A socioeconomic condition characterized by a significant lack of financial resources or income, leading to an inability to meet basic living needs.