Explain the difference between real and nominal income. How can you get an approximation of the percentage change in real income from one time period to another?
What will be an ideal response?
Real income is determined by dividing nominal income by the price level expressed in hundredths. The percentage change in real income can be approximated by subtracting the percentage change in the price level from the percentage change in nominal income.
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An increase in the price of a firm's product
A) decreases its value of marginal product of labor. B) increases its demand for labor. C) increases its supply of labor. D) None of the above answers is correct.
The above figure shows the demand and supply curves for high-skilled and low-skilled labor. The wage rate
A) of high-skilled labor is $7.00 and of low-skilled labor is $6.00. B) of high-skilled labor is $9.00 and of low-skilled labor is $7.00. C) of high-skilled labor is $6.00 and of low-skilled labor is $4.00. D) of high-skilled labor is $9.00 and of low-skilled labor is $4.00.
Historical note concerning U.S. price levels: During the 1970s, with the onslaught of OPEC oil price increases
a. inflation occurred and it was primarily cost-push b. inflation was approximately zero because the Vietnam war ended and the demand for military goods fell dramatically c. deflation was persistent d. inflation occurred and it was primarily demand-pull e. stagflation, the difference between inflation and deflation, was approximately zero
A U.S. family earning $80,000 would be in the top 20 percent of income distribution in 2011
a. True b. False Indicate whether the statement is true or false