Spend money on consumption
Spend money on investment
Increase his money hoard
Add to cash balance
When demand for money is so high that interest rates cannot fall low enough to sufficiently increase investment.
When inflation and unemployment both increase at the same time.
When the total supply of money in the economy is trapped within a certain range above or below which the central bank cannot increase or decrease it.
When the amount owed on a mortgage is greater than the value of the property to which the mortgage is applied.
Consumption and Investment
The Law of Supply and Demand
The Labor Theory of Value
The Theory of Wage Cycle
The Money Illusion of Labor.
BC workers will lose their jobs.
The SD curve will shift from DL to DS.
BE workers will receive higher wages.
Workers in the EGH triangle will be unemployed.
Falling wage rates will reduce income tax revenues, thus reducing government spending.
Falling wage rates will raise interest rates, thus inhibiting the important housing market.
Falling wage rates will reduce consumption in favor of savings.
Falling wage rates will increase debt.
It reduces the amount of money workers can spend, thus reducing consumption.
It reduces the pressure on the price of wages.
It makes workers less productive.
It reduces inflation, which inherently increases unemployment.