If your salary increases at a lower rate than prices are increasing, what would happen to your buying power?
What will be an ideal response?
Your money would have less buying power.
You might also like to view...
When a monopolistically competitive firm lowers its price, one good thing happens to the firm. What is this "one good thing" called?
A) the income effect B) the price effect C) the substitution effect D) the output effect
During Prohibition crime ____ and the amount spent on law enforcement ____
a. stayed roughly the same; remained level b. increased dramatically; more than doubled c. remained level; more than doubled d. decreased slightly; more than doubled
Utility is:
a. the cost associated with an additional unit of product. b. the satisfaction obtained from a good or service provided. c. the value that a third party places on a good or service. d. the price that a seller places on a good or service being provided.
Proper inflation accounting is necessary to measure the size of the real deficit because
A. as a lender, the government gains from inflation. B. otherwise, the deficit is understated in inflationary times. C. the government is a borrower that pays back dollars of less real value in inflationary times. D. interest payments tend to fall in inflationary times.