Other things the same, if workers and firms expected prices to rise by 2 percent but instead they rise by 3 percent, then
a. employment and production rise.
b. employment rises and production falls.
c. employment falls and production rises.
d. employment and production fall.
a
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The government purchases multiplier will be larger if the marginal income tax rate decreases
Indicate whether the statement is true or false
Why is gold very expensive, even though it is not essential to life, while water, which is essential to life, is inexpensive?
Ceteris paribus, an increase in the price of a good will cause the
a. quantity demanded of the good to increase. b. quantity supplied of the good to decrease. c. consumer surplus derived from the good to decrease. d. demand of the good to increase.
For an oil-importing country such as the United States, the immediate effect of a supply shock caused by an increase in the price of imported oil would tend to be
a. an increase in real output and a decrease in the general level of prices. b. a decrease in real output and an increase in the general level of prices. c. a decrease in both the general level of prices and real output. d. an increase in both the general level of prices and real output.