Given the basic rule of thumb for the relationship among inflation, productivity and nominal wage increases, if wages rise by 1 percent and productivity increases 2 percent, one would predict inflation to be:
A. 3 percent.
B. 1.5 percent.
C. 0 percent.
D. ?1 percent.
Answer: D
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Refer to the figure below. Suppose that the demand curve for barley can be characterized by the equation P = 100 - 2Q d . Suppose further that price was $10.00 and a $10.00 tax is imposed on the market.
(A) How many barleys would be purchased at a price of $10.00? After tax?
(B) What is the amount of tax revenue generated by the tax?
(C) How much excess burden is generated by the tax?
(D) What is the amount of consumer surplus before and after the tax? What is the difference in
consumer surplus? Is it equal to excess burden plus the tax revenue?
If the wage rate doesn't change but a profit-maximizing competitive firm hires fewer workers, we know that
A) the price of the product increased. B) technical change occurred that increased labor productivity, reducing the firm's demand for labor. C) demand for the product fell or there has been a reduction in labor productivity. D) marginal factor cost increased.
In 2007, the Fed began using an additional monetary policy tool called the term auction facility program
Indicate whether the statement is true or false
Which of the following is true of exchange?
A) Exchange permits trading partners to expand their total output of goods and services as the result of greater specialization in areas where each has a comparative advantage. B) The total output that trading partners are able to produce is not influenced by whether they trade with each other. C) Exchange is a zero sum activity; if one party gains, the other must lose an equal amount. D) The exchange value of a good is determined by the cost of the resources required to pr