Which of the following is not an example of inflation causing a redistribution of income because the inflation was unanticipated?
A) Firms have to hire an extra worker to change prices in its store because of inflation.
B) A worker receives a raise in salary that is less than the rate of inflation, because management under-predicted inflation.
C) A bank collects a lower amount of interest from a loan because inflation was under-predicted.
D) A firm signs a 3-year contract with a union based on a 2 percent anticipated rate of inflation per year, and the actual rate of inflation ends up being 7 percent per year.
A
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Why does popular democracy, as defined in the U.S. Constitution, contribute to long-term economic growth and political stability?
(a) It allows regular change in the structure of the government. (b) It provides incentive to invest, innovate and invent. (c) It permits the President of the U.S. to choose fiscal policies to advance contemporary mercantilism. (d) It transfers wealth from the extremely wealthy to the desperately poor.
How much labor does a firm require to produce q = 1000 when capital is fixed at 5 and they have a production function equal to q = 200L0.5K0.5?
A) L = 5 B) L = 2.5 C) L = 200 D) L = 2.25
What are the two approaches followed by the U.S. government to ease the burden on the victims of free trade?
When a $1,000 check written on the Chase Bank is deposited in an account at the Bank of America the:
a. Liabilities of Chase rise by $1,000. b. Reserves of Chase fall by $1,000. c. Liabilities of the Bank of America fall by $1,000. d. Reserves of the Bank of America fall by $1,000. e. All the above.