Suppose Workers Become Pessimistic About Their Future Employment, Which Causes

question 28

Multiple Choice

Suppose workers become pessimistic about their future employment, which causes them to save more and spend less. If the economy is on the intermediate range of the aggregate supply curve, then:

• A) both real GDP and the price level will fall.
• B) real GDP will fall and the price level will rise.
• C) real GDP will rise and the price level will fall.
• D) both real GDP and the price level will rise.

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Definitions:

Media Scandals

Events or actions that receive widespread public disapproval and are extensively covered and criticized in the media.

Compensating Salespeople

The practice of providing monetary and non-monetary rewards to sales staff for their performance and achievements.

Stock Ownership Incentive Plans

Programs designed to give employees the opportunity to buy or receive shares in the company they work for as a form of incentive.

Individual Incentive Plans

Compensation strategies designed to motivate individual employees by providing rewards, typically financial, based on their personal performance or achievements.