In the short run, if the actual rate of inflation is lower than the expected rate, then:
A. Nominal wages will rise, profits will fall, and unemployment will rise
B. Nominal wages will fall, profits will rise, and unemployment will fall
C. Nominal wages will rise, profits will rise, and unemployment will fall
D. Nominal wages will fall, profits will fall, and unemployment will rise
A. Nominal wages will rise, profits will fall, and unemployment will rise
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Demand deposits are: a. accounts in which one cannot write a check directly but from which the individual can easily withdraw money. b. the coins and bills that circulate in an economy
c. purchased from a bank or financial company, signed, and then redeemed with an additional signature when one wants to spend them. d. deposits in banks that are available upon making a cash withdrawal or writing a check.
Which of the following is NOT a reason why economists usually work with mathematical models?
A. Because most economic choices are quantitative in nature. B. Mathematical models can provide precision, while quantitative models cannot. C. Mathematical modeling imposes intellectual rigor. D. Mathematical models can be used to settle disputes over normative economic questions.
The combination of expansionary U.S. monetary policy and contractionary U.S. fiscal policy should:
A. raise the exchange rate if prices and income do not change. B. have an ambiguous effect on the exchange rate if prices and income do not change. C. not affect the exchange rate if prices and income do not change. D. reduce the exchange rate if prices and income do not change.
How did asset backed commercial paper (ABCP) rollover risk contribute to the financial crisis of 2007-2009?
What will be an ideal response?