Assume that initially your nominal wage was $16 an hour and the price index was 100. If the price level increases to 105, then your:
A. Real wage has increased to $21
B. Real wage has decreased to $15.24
C. Nominal wage has increased to $21
D. Nominal wage has decreased to $15.24
B. Real wage has decreased to $15.24
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Since 1960 the distribution of income in the United States has
A. become more equal. B. become less equal. C. remained about the same.
Suppose an economist tests the theory that when the price of leather increases, fewer pairs of shoes are produced. He observes more shoes being produced when the price of leather increases. At the same time, a new production technology allowed for more shoes to be produced in less time. He has
A. has confused association and causation. B. cannot test his theory because his observations violate the ceteris paribus assumption. C. used normative economics to answer a positive question. D. built a model with too many variables.
The purpose of the IMF is to:
A. provide developing countries with short-term loans and technical assistance. B. determine monetary and fiscal policy in developing countries. C. determine exchange rates for developing countries. D. buy and sell the currencies of developing countries in order to stabilize their value.
A rise in the price of a bond causes the yield of the bond to
A. rise. B. fall. C. remain unchanged. D. rise if it's a short-term bond, fall if it's a long-term bond.