If productivity increases by 5 percent but wages increase by 2 percent, then it is most likely that the price level will:
A. rise by 3 percent.
B. rise by 7 percent.
C. fall by 3 percent.
D. fall by 7 percent.
Answer: C
You might also like to view...
What are the key factors that determine the profitability of a firm in a monopolistically competitive market?
What will be an ideal response?
Which one of the following is not a function of money?
A. open market operation B. store of value C. medium of exchange D. unit of account
The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. Suppose the economy is closed. The equilibrium price of a car is ________ and equilibrium quantity is ________.
A. $8,000; 12,000 B. $12,000; 8,000 C. $6,000; 14,000 D. $10,000; 10,000
Which of the following statements is most correct?
A. Money is a means of payment but is not part of wealth. B. Money is wealth but not all wealth is money. C. In order to be considered part of a person's wealth, an asset must have a positive return. D. Wealth is a store of value and a means of payment.