Unions understand that they can end up being big winners from inflation if they sign multiyear fixed-wage contracts
Indicate whether the statement is true or false
F
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Which of the following are reasons why Social Security is compulsory?
a. A pay-as-you-go system needs new contributors to maintain solvency. b. A pay-as-you go system cannot let older individuals opt out of benefits. c. The adverse selection problem. d. all of the above e. a and c
If liquidated damages stated in a contract are too low, inefficient breaches will be profitable, and if damages are too high, efficient breaches will not occur
Indicate whether the statement is true or false
One year before maturity, the price of a bond with a principal amount of $1,000 and a coupon rate of 5% paid annually fell to $981. The one-year interest rate must be:
A. 8.5%. B. 5.0%. C. 7.0%. D. 1.9%.
Which of the following best describes a steady state?
A. Each firm in the economy receives a steady stream of income. B. The standard of living is increasing at a stable rate. C. Political stability is maintained by the state. D. Output per worker, consumption per worker, and capital per worker are constant.