When the inflation rate rises, the purchasing power of nominal income:
a. remains unchanged.
b. decreases.
c. increases.
d. changes by the inflation rate minus one.
b
You might also like to view...
A total product curve shows the
a. aggregate output of many firms in an industry. b. amount of product consumers will take off the market. c. maximum amount of product that it is technically possible to produce. d. relationship between units of inputs and total output.
The factor that leads to underpricing and overuse of an economic resource is
a. human greed and selfishness. b. capital markets. c. the lack of an enforceable property right. d. the lack of understanding of pollution and its effects.
Once voting preferences become more complicated than those assumed by the median-voter theorem:
A. the policies preferred by the average voter become more important. B. the way in which votes are cast becomes important. C. economists cannot analyze voting preferences successfully. D. the politicians stay more extreme in their views.
On a typical budget constraint, the opportunity cost of food in terms of shelter is
A. the inverse of the opportunity cost of shelter in terms of food. B. Ps/Pf. C. Pf/Ps. D. zero.