If you negotiated a salary based on an anticipated inflation rate of 4 percent, and the actual inflation rate turned out to be 6 percent:
A. the purchasing power of your real wages would be more than you anticipated.
B. your employer would have gained at your expense.
C. your real wage will increase, but your nominal wage will decrease.
D. the purchasing power of your wages will not change, since purchasing power is based on your nominal wage.
Answer: B
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Which of the following curves reflects the idea that in the long run, output is determined only by the factors of production and given technology?
A) the aggregate demand curve B) the long-run aggregate supply curve C) the Keynesian aggregate supply curve D) the market supply curve
According to your authors, economics
A) alone is not the only, or even the best, perspective to make sense out of the real world. B) can predict real-world phenomena with roughly 85-90% accuracy. C) generates conclusions every reasonable person should accept as true. D) is a false doctrine because individuals have been shown to act non-selfishly.
The rail system in Metropolis is a natural monopoly. If the government regulates the system by setting the fare equal to marginal cost, which of the following will be true?
a. The managers of the rail system will be allowed to adjust marginal cost so that they can get a normal rate of return on capital. b. The managers of the rail system will be allowed to adjust marginal cost so that they can get a fair profit. c. The rail system will earn economic profit at that fare. d. If the government doesn't give the rail system a subsidy to supplement revenue from fares, the system will face continuous economic losses. e. If the government doesn't give the rail system a subsidy to supplement revenue from fares, fare increases will push marginal cost upward.
Which statement about the economic impact of immigration is true?
a. State and local governments bear most of the costs of immigration. b. The federal budget pays the costs associated with educating immigrants. c. Immigration tends to have a positive effect on state and local budgets. d. Immigration tends to have a negative effect on the federal budget.