Nancy's union has negotiated a three-year wage contract that provides for a 2.4% increase indexed to inflation. The rates of inflation are forecast to be 1.62%, 1.93% and 2.21% respectively. What will Nancy’s wage increase be in the first year?
a. 1.62%
b. 5.76%
c. 4.02%
d. 4.61%
c. 4.02%
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Which of the following is not a characteristic of a battle of the sexes game?
A) Each player has a dominant strategy. B) Nash equilibria exist at every outcome where the players successfully coordinate. C) The two general outcomes are where players either coordinate with one another or they do not. D) The payoff for coordinating is higher than the payoff for not coordinating.
The demand for a good is more price inelastic if
A) its price is higher. B) the percentage of income spent on it is larger. C) it is a luxury good. D) it has no close substitutes.
In contrast to richer countries, most residents of poorer nations will have
a. only some primary education. b. primary and secondary education. c. higher education. d. higher levels of productivity.
In the following figure, AB is the production-possibility curve of Canada. The line PQ shows the price ratio of one bushel of wheat/bale of cotton. The international price ratio is 0.25 bushels of wheat/bale of cotton as shown by the line RS. I1 and I2 are two of the community indifference curves of Canada. Which of the following can be inferred from this figure?
A. Canada has a comparative advantage in the production of wheat. B. Canada has an absolute advantage in the production of both goods. C. Canada has an absolute disadvantage in the production of both goods. D. Canada has a comparative advantage in the production of cotton.