When a country decreases the official value of its currency, for example, Russia changes the value of the ruble from $.16 to $.04, it is said to have ____ its currency
a. floated
b. revalued
c. devalued
d. depreciated
c
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New classical macroeconomists believe that
a. markets clear each and every period. b. the labor market does not clear. c. individuals are locked into money wage constraints. d. individuals face market constraints in their ability to act in their own self-interest. e. none of the above.
If the inflation rate is 3 percent and the nominal wage is frozen for one year, by how much will the real wage change?
a. It will decrease by about 3 percent. b. It will not change. c. It will increase by 3 percent. d. It will triple. e. We do not have enough information to determine this answer.
A reduction in inflation would lead to
a. more frequent price changes and increased variability of relative prices. b. more frequent price changes and decreased variability of relative prices. c. less frequent price changes and increased variability of relative prices. d. less frequent price changes and decreased variability of relative prices.
Price ceilings keep market price
A. above the equilibrium price and create surpluses. B. above the equilibrium price and create shortages. C. below the equilibrium price and create surpluses. D. below the equilibrium price and create shortages.