Question:

MACROECONOMICS- change in real GDP?

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Will someone tell me how to figure this out? I don't need the answers as much as an explination.

If there is a decrease in wealth, real GDP will ________. (rise, fall)

If there is a decrease in wage rate, real GDP will ________ (rise, fall)

Consumers start to expect lower future incomes.

There is a decrease in productivity.

Consumers start to expect higher future prices.

There is a decrease in personal income taxes.

There is an adverse supply shock.

There is an increase in

And so on in that fashion

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1 ANSWERS


  1. I believe real GDP falls on both instances.  When there is less wealth, or when the value of your belongings decrease, people tend to spend less.  

    Same with the wage rate, if people are earning less, they will spend less; thus, lowering GDP.

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