After a nation starts importing a good from overseas, the domestic price of the good
A) stays the same.
B) rises.
C) falls.
D) might change, but more information about what the country exports is needed to determine if the price rises, falls, or does not change.
E) might change, but more information about what else the country imports is needed to determine if the price rises, falls, or does not change.
C
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The fact that the CPI is a biased measure of the inflation rate means government outlays will
A) increase at a slower rate than the actual inflation rate. B) increase at the same rate as the actual inflation rate. C) increase at a faster rate than the actual inflation rate. D) sometimes increase faster and sometimes increase slower than the actual inflation rate depending on whether the actual inflation rate exceeds 1.1 percent per year or is less than 1.1 percent per year. E) None of the above because the bias in inflation measured using the CPI has nothing to do with government outlays.
As actual output falls below the potential level in the short run, which of the following is most likely to occur? a. More resources will become unemployed. b. The price level will increase
c. Real GDP will increase. d. Nominal GDP will remain constant. e. The natural rate of unemployment will fall.
Suppose workers agreed to a contract that guaranteed a real wage increase of 3 percent per year. If the inflation rate was 7 percent over the following year, what is the required increase in the nominal wage to meet the contract requirements?
a. 10 percent b. 3 percent c. 4 percent d. 7 percent e. 1 percent
You have noticed that there is a persistent shortage of teachers in an inner-city school district in your state. Based on this observation, you suspect that:
A. there is an excess supply of teachers in other districts. B. the wage for teachers in that district is higher than the wage in other districts. C. the wage for teachers in that district is lower than the equilibrium wage. D. the demand for teachers in the inner-city school district is too low.