If workers and firms expect that inflation will be 3 percent next year, and real wages are not changing over time, by how much will nominal wages increase?
A) more than 3 percent B) 3 percent
C) less than 3 percent D) depends on actual inflation for next year
B
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Basic research: a. usually has a larger immediate payoff than applied research
b. is more practical than applied research. c. is the search for general knowledge without a specific product or procedure in mind. d. is research done by a firm to market a good. e. is research done by a firm during the production of a good.
Most modern monetarists believe that
A. the capitalist system is inherently unstable and unpredictable. B. structural economic changes are major causes of business cycles. C. inflation is explained by too rapid a rate of growth of the nominal money supply, resulting in "too much money chasing too few goods." D. deflations are caused by contagious pessimism among investors.
Which of the following goods is given in the textbook as an example of a good whose price is subject to volume discounts?
A. Electricity B. Pizza C. Gasoline D. Yogurt
In the simplified circular flow diagram, leakage can occur when consumers save some income.
Answer the following statement true (T) or false (F)