If workers received a 5 percent wage increase and the rate of inflation was 5 percent, then their real wage:
A. remained constant.
B. equaled the nominal wage.
C. increased.
D. decreased.
Answer: A
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Debt service payments appear in
(a) the current account. (b) the capital account. (c) the cash account. (d) errors and omissions.
The use of tax penalties to control pollution represents a
A. price-based market approach to the pollution problem. B. nonmarket approach to the pollution problem. C. major source of current federal revenues. D. pollution-rights solution to the pollution problem.
Suppose the U.S. dollar is defined by law as being equal to 0.1 ounce of gold. Further suppose the British pound is defined as being equal to 0.05 ounce of gold. The implied exchange rate between the pound and the dollar is
A. A fixed rate at which $1 = 2 pounds. B. A flexible rate at which $2 = 1 pound. C. A fixed rate at which $2 = 1 pound. D. A flexible rate at which $1 = 2 pounds.
Private benefits are those benefits that accrue:
A. without compensation to someone other than the person who caused them. B. indirectly to the decision maker of a market exchange. C. directly to the decision maker of a market exchange. D. to third parties without direct government intervention.