If the nominal wage rises by 6 percent, and the price level falls by 2 percent, the real wage will:
A. be unaffected.
B. rise by 4 percent.
C. fall by 4 percent.
D. rise by 8 percent.
Answer: D
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In the short run, a firm in monopolistic competition produces where MR = MC
Indicate whether the statement is true or false
Suppose the Fed has a target inflation rate of 3%, the Fed always hits its target, and the inflation rate has been 3% for several years
Furthermore, assume Amazon sets the price of its Kindle Fire at $140 in 2012 and wants to keep the real price of the Kindle constant in order to maximize profits. Now suppose that the Fed announces on January 1, 2013 that it will decrease its target rate for inflation to 1%. If Amazon has adaptive expectations, it will set its price for the Kindle in 2013 at A) $137.20. B) $140.00. C) $141.40. D) $144.20.
In the short run, a monopolistic competitor
A) produces at minimum efficient scale. B) produces where P = AC. C) sets P = MC. D) sets MR = MC.
If a German firm owns a U.S.-based firm that is domiciled in the U.S., the combined firm is subject to the corporate tax laws in ________ and income tax laws in ________.
A) Germany; Germany B) Germany; U.S. C) U.S.; Germany D) U.S.; U.S.