A basic rule of thumb to predict inflation is that it equals:
A. nominal wage increases minus productivity growth.
B. real wage increases minus productivity growth.
C. productivity growth minus nominal wage increases.
D. productivity growth plus nominal wage increases.
Answer: A
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According to your authors, the "boom" phase of the so-called "business cycle" is
A) caused by an expansionary increase of the money supply. B) a systematic accumulation of mistakes among businesses and households across the economy. C) undertaken because business planners miscalculate the expected profitability of their new ventures. D) ultimately followed by a recessionary "bust" as people begin to correct for the mistakes they've made during the boom phase of the cycle. E) described correctly by all of the above statements.
The World Bank obtains the funds it lends by:
a. selling bonds on the international bond market. b. selling bonds to countries it has loaned funds to. c. collecting each country's annual membership fee or quota. d. levying a small tax on every foreign exchange conversion worldwide. e. depending on voluntary subsidies from member nations.
According to the loanable funds model, which of the following events would result in higher interest rates and greater saving?
a. Firms become pessimistic about the future and, as a result, they cut back on their plans to buy new equipment and build new factories. b. The government goes from running a budget deficit to running a budget surplus. c. Congress passes a reform of the tax laws that encourages greater saving. d. Congress passes a reform of the tax laws that encourages greater investment.
China is the world’s largest wheat producer. If China’s real gross domestic product grew by 11 percent in the previous year, it implies that
A. production of wheat grew by more than 11 percent. B. products other than wheat grew by less than 11 percent. C. China’s overall output grew by 11 percent. D. production of wheat is declining in China.