Identify the correct statement.
?a. If the inflation rate is high, real wages and nominal wages change by the same amount.?
b. If the price level increases, real wages will increase.?
c. ?In periods of low inflation, real wages are constant but nominal wages decline.
d. ?If the price level increases, nominal wages will fall.
e. In periods of high inflation, real wages change even if nominal wages remain constant.?
Answer: e. In periods of high inflation, real wages change even if nominal wages remain constant.?
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Assume that a lawyer and a secretary have been working together for two years. The lawyer suddenly realizes that he prepares legal briefs and types faster than the secretary. Upon learning this he decides to let his secretary go
Why might this be a mistake?
Suppose that if your income is $100,000, your tax is $20,000, but if your income is $200,000, your tax is $45,000. Such a tax is
A. Proportional. B. Regressive. C. A flat tax. D. Progressive.
When incomes fail and the qualities of steak purchased change, economists make the ceteris paribus assumption because: (check all that apply)
a. the assumption is important in distinguishing between macroeconomics and microeconomics. b. economists would otherwise be confused by the effects of changes of other variables on the quantity of steak purchased. c. income is the most important factor that influences the quantity of steak purchased. d. economists are able to account for all of the variables that impact the quantity of steak purchased. e. the assumption helps isolate the effects of a change in income on the quantity of steak purchased.