Figure 151: the Labor Market A A

question 83

Multiple Choice

Figure 15.1: The Labor Market a. and d. b. .
e.
None of these answers is correct.
c. .
-In the stylized DSGE model, if government expenditures rise, ________ rise(s) and ________, which causes ________.

• A) labor demand; real wages rise; inflation to rise
• B) wages; labor demand falls; consumption to decline
• C) labor supply; real wages fall; consumption to fall
• D) real interest rates; inflation rises; the marginal product of capital to rise
• E) taxes; labor demand rises; output to fall

---

Definitions:

Capital Spending

Expenditures by a business for acquiring or upgrading physical assets such as property, industrial buildings, or equipment.

Earnings Estimate

A projection or forecast of a company's future earnings per share, often provided by analysts.

Dividend Income

Income received from owning shares in a company, usually distributed from the company's profits.

Holders of Record

Registered owners of a security at a specific point in time, often used to determine who is entitled to dividends or rights distributions.