If workers and employers agree to a three-year wage contract under the expectation of 5 percent inflation, and inflation turns out to be 3 percent, then:
A. workers lose and employers gain.
B. workers lose and employers lose.
C. workers gain and employers gain.
D. workers gain and employers lose.
Answer: D
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In the IS-LM Model, assuming downward sloping IS curve and upward sloping LM curve; increase in consumers' wealth is going to
A) cause a movement along the IS curve. B) cause a rightward shift of the IS curve. C) cause a leftward shift of the LM curve. D) cause a rightward shift of the LM curve.
The international exchange rate system, which was set up just after World War II, continued (with some modifications) until the
a. recession of the early 1960's. b. middle of the Vietnam War. c. middle of the Persian Gulf War. d. early 1970's.
If a price is above equilibrium,
A. A surplus will cause the price to fall and the quantity supplied to decrease. B. A surplus will cause the price to fall and the quantity supplied to increase. C. A shortage will cause the price to fall and the quantity supplied to decrease. D. A shortage will cause the price to rise and the quantity supplied to increase.
A firm has a marginal cost of $18 and charges a price of $27. The Lerner index for this firm is:
A. 0.67. B. 0.50. C. 0.75. D. 0.33.