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.

Understand the number and duration of recessions since WWII.

Grasp the trends in consumer behavior and economic indicators over different periods.

Recognize the stakeholders affected by inflation and deflation.

Comprehend the phases of the business cycle and their characteristics.

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Definitions:

Direct Marketing Database

A collection of data about customers or potential customers that is used to tailor marketing strategies directly to the interests of individuals.

Income Tax Rate

The percentage of an individual's or corporation's income that is paid to the government as tax.

Catalog

A comprehensive collection or list of items, especially one systematically arranged, often found in printed form or online for shopping purposes.

Media Usage

The manner and extent to which individuals or organizations use various channels of communication to receive or disseminate information.