If a private wage contract is agreed upon with a cost of living adjustment such that wage hikes are equal to increases in the CPI,
A) the employer benefits because wages will rise less than the change in actual prices.
B) workers exactly keep pace with changes in the cost of living.
C) workers benefit because the CPI increases more rapidly than does the cost of living.
D) the CPI bias means that workers benefit if the price level rises and the employer benefits if the price level falls.
E) the CPI bias means that workers benefit if the price level falls and the employer benefits if the price level rises.
C
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Which of the following best describes an assumption economists make about human behavior?
A) They assume that people take into account the question of fairness in all decisions they make. B) They assume that individuals act rationally all the time in all circumstances. C) They assume that rational behavior is useful in explaining choices people make even though people may not behave rationally all the time. D) They assume that individuals act randomly.
Monetarism is a school of thought put forth by ________, who argued that the economy would most likely be at potential GDP
A) Finn Kydland and Edward Prescott B) Milton Friedman C) Robert Lucas and Thomas Sargent D) Karl Marx
If the U.S. price level decreased relative to price levels in foreign countries, what would be the impact on domestic aggregate supply and aggregate demand curves?
a. the aggregate supply curve would shift outward and the aggregate demand curve would remain unchanged b. the aggregate supply curve would shift inward and the aggregate demand curve would remain unchanged c. the aggregate demand curve would shift outward and the aggregate supply curve would remain unchanged d. the aggregate demand curve would shift inward and the aggregate supply curve would remain unchanged e. the domestic aggregate demand and supply curves would remain unchanged
Complete crowding out occurs when an increase in government spending is completely offset by an equal increase in tax revenues
Indicate whether the statement is true or false