In the long run, if the price level increases, then nominal wages and other input prices:
A. Also rise, so firms will reduce their output level
B. Also rise, so firms will not change their output level
C. Not change, so firms will not change their output level
D. Decrease, so firms will increase their output level
B. Also rise, so firms will not change their output level
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A bond's price and its yield to maturity are inversely related because
A) discounting future payments at a higher rate reduces the present value of the payments. B) discounting future payments at a higher rate increases the present value of the payments. C) an increase in the yield to maturity will lower a bond's coupon rate and hence its price. D) a fall in a bond's price will lower its par value and hence its yield to maturity.
Firms in monopolistically competitive markets can differentiate their products on the basis of: a. brand identity
b. quality. c. convenience. d. all of the above.
A change in expectations about future prices by consumers, who now believe that prices will be higher than they earlier thought, will eventually result in a(n)
a. increase in the interest rate b. decrease in the interest rate c. change in the interest rate but the direction of the change depends upon how much expectations changed d. change in the market rate of interest but the equilibrium rate of interest remains unchanged e. change in the equilibrium rate of interest but the market rate of interest remains unchanged
If the taxes by state and local governments were combined with the Federal tax system, the overall tax structure in the U.S. would best be characterized as:
A. Progressive B. Highly regressive C. Slightly regressive D. Proportional