Normally, a firm's borrowing cost is the expected real interest rate, which takes expected inflation into account. With price stickiness, however, the firm will consider only:
a. expected inflation.
b. expected wages.
c. the nominal rate of interest.
d. the expected appreciation of the asset.
Answer: c. the nominal rate of interest.
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Indicate whether the statement is true or false
What are the five most important variables that cause the market demand curve for labor to shift?
What will be an ideal response?
Advocates of the minimum wage admit that it has some adverse effects, but they believe that these effects are small and that a higher minimum wage makes the poor better off
a. True b. False Indicate whether the statement is true or false
Janet bought flour and used it to bake bread she ate. ABC Bakery bought flour which it used to bake bread that customers purchased. In which case will the flour be counted as a final good?
a. Janet's purchase and ABC Bakery's purchase. b. ABC Bakery's purchase but not Janet's purchase. c. Janet's purchase but not ABC Bakery's purchase. d. Neither Janet's purchase nor ABC Bakery's purchase.