Question

Question 37 1.67 pts In the labor market, the adjusts to balance the quantity of labor supplied and the quantity of labor demanded minimum wage O efficiency average wape paid to the workers interest rate • Previous Net Not saved mour A 561 w ] 20 F3 F 9 % 5 8 # 3 7 6 4 2 Р T Y 20 W E J K H G F. S D M

Answer 1

37) Average wage rate.

( ln the labor market, the average wage rate adjusts to make the quantity demanded equal to quantity supplied. Lower the wage rate, higher the demand for labour and lower the supply of labour. Higher the wage rate , higher the labor supply and lower the demand for labor . minimum wage will bring unemployment in the labor market. Efficiency wage is given to stop the employees from shirking.)

38) interest rates are rising.

( In general, a households will forgo present consumption their return from savings is high. Higher interest rates imply higher return on savings.Therefor, when interest rates are rising, there is bigger incentive to save rather than keep spending.on the other hand, when the interest rates are lower,there is bigger incentive to spend rather than to keep saving.)

39) 1. Decrease

2. Decrease

3. Increase.

( consumption spending as well as import spending is directly related to income. An increase in income would lead to an increase in consumption spending and spending on imports. On the other hand, a decline in income would lead to a decrease in consumption spending and investment spending. Net export spending refers to the differences between value of exports and Import spending. Since there is a fall in import spending, value of net export spending will increase.

Here: change in value exports is not mentioned, so we are not taking that into consideration.)