If a country experiences persistently low inflation, which of the following tends NOT to occur?
A) wage indexation will become less important
B) nominal wages will be set for shorter periods of time
C) the markup over labor costs will decrease
D) all of the above
A
You might also like to view...
What are the five steps by which economists arrive at a useful economic model?
What will be an ideal response?
Trish grows oregano in her backyard to use in her homemade pesto sauce. How is this gardening included in GDP?
a. It is included in real GDP. b. It is included in nominal GDP. c. It is not included in GDP. d. It is included as an intermediate good.
In 1981, the US government passed a law that significantly lowered tax rates on high-income individuals. The premise was that high tax rates deter high-income individuals from working and investing, reducing the growth of the economy. This is an example of
A. the equality-efficiency trade-off. B. usury. C. the effects of budget deficits on future generations. D. the cost disease of the public sector. E. the importance of externalities.
Hostile takeovers of corporations have been in the business news for some time now. Several states have passed laws making it harder for out-of-state corporations to acquire firms headquartered in their states. Several corporations have established “golden parachutes” to give executives high payoffs in case of hostile takeover. What market imperfection is likely to be worsened by these actions? Explain.
What will be an ideal response?