Suppose a worker signs a contract containing an 8 percent nominal wage increase with inflation expected to be 3 percent. Inflation turns out to be 6 percent, but the contract also contains 60 percent COLA protection
The worker's real wage under the contract A) falls by 1.2 percent.
B) falls by 2.4 percent.
C) rises by 3.8 percent.
D) rises by 3.0 percent.
E) rises by 1.8 percent.
C
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____________ also known as cash cards are computerized banking transactions, they remove money directly from your account
a. Credit cards b. Debit cards c. Smart cards d. Access cards
The risk-free rate is usually approximated by interest rates on U.S. government debt, because the US government:
A. is considered extremely unlikely to default. B. sets all policy concerning interest rates. C. backs all loans secured with that rate. D. will never default on a loan that it makes.
A change in the price of a good has no effect on the supply schedule
a. True b. False Indicate whether the statement is true or false
Suppose you place $10,000 in a retirement fund that earns a nominal interest rate of 8 percent. If you expect inflation to be 5 percent or lower, then you are expecting to earn a real interest rate of at least:
A. 1.6 percent. B. 3 percent. C. 4 percent. D. 5 percent.