What is a "cost-of-living" adjustment?
What will be an ideal response?
Increases in nominal wages or benefits to keep purchasing power constant.
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Which of the following defines marginal utility?
A. the total satisfaction or happiness received from the consumption of a good, service, or combination of goods and services B. the additional satisfaction or happiness received from the consumption of an additional unit of a good or service C. the maximum amount of satisfaction or happiness derived from consuming a product D. the change in total utility divided by the price of a product
Without successful bargaining, economic efficiency will not be achieved when there is a negative externality because
A) too much of the good will be produced. B) too little of the good will be produced. C) economic surplus is being maximized. D) the externality causes consumer surplus to exceed producer surplus.
According to the horizontal-equity principle of taxation
A) individuals who receive the benefits of a good or service should bear a greater share of the tax burden. B) people in the same economic situation should be treated equally. C) individuals who are willing to bear a greater share of the tax burden should be compensated with non-monetary benefits. D) individuals who are most able to pay should bear a greater share of the tax burden.
The relative price of a country's goods and services in terms of foreign goods and services is the real exchange rate
Indicate whether the statement is true or false