In the 1970s, a period of a high rate of inflation, a news magazine article listed people who were losing from inflation because their real purchasing power was falling. Those who lost the most were university professors
Which of the following explains this?
A) Their wage rates did not increase as much as the CPI.
B) The marginal benefit of their work was falling.
C) The professors' market basket was different than the market basket used to calculate the CPI.
D) Their wage rates increased more rapidly than the CPI.
E) The professors suffered from the CPI bias.
A
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A boss can type 200 words per minute and sell 2000 units of the company's product in one day. His assistant can type 150 words per minute and sell 1000 units of the company's product in one day. Discuss who has absolute and comparative advantages in the "production" of typing and selling.
What will be an ideal response?
Select the letter of the diagram in Figure 28.1 that best represents the effect of each event on the United States wheat market, ceteris paribus: The dollar increases in value in the foreign exchange markets. (See Figure 29.4.)
A. a. B. b. C. c. D. d.
In a Keynesian model, a temporary increase in government purchases would cause output to ________ and the domestic real interest rate to ________, in the short run.
A. remain unchanged; increase B. increase; decrease C. increase; increase D. remain unchanged; decrease
For normal goods, the income and substitution effects help explain the downward slope of the demand curve.
Answer the following statement true (T) or false (F)