The CPI equals 1.00 in year one and 1.05 in year two. If the nominal wage is $15 in year one and a contract calls for the wage to be indexed to the CPI, what will be the nominal wage in year two?
A. $15.00
B. $15.75
C. $14.29
D. $16.05
Answer: B
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A direct implication of the special interest theory of government is that _____
a. political pressure from special interests pushes government to expand b. special interests get whatever they want c. special interests do not get what they want under Incrementalism d. the general public general can apply more pressure than special interests and thus will move the budget in drastic ways, depending upon public sentiment
When market conditions in a price-taker market are such that firms cannot cover their production costs,
a. the firms will suffer long-run economic losses. b. the firms will suffer short-run economic losses that will be exactly offset by long-run economic profits. c. some firms will go out of business, causing prices to rise until the remaining firms can cover their production costs. d. all firms will go out of business, since consumers will not pay prices that enable firms to cover their production costs.
Which of the following is not an example of Joel Waldfogel's "Tyranny of the Market"?
a. A daily newspaper tailored to appeal to the majority of readers in an area. b. Nike creating specialized shoes for American Indians' wider feet. c. Pharmaceutical companies spending research and development funds on drugs for common diseases. d. Airlines offering daily direct flights from one large city to another.
Which of the following statements is TRUE?
A. APC + MPS = MPC + APS B. MPC + APS < 1 C. APC + MPS = 1 D. APC + APS = 1