A labor contract provides for a first-year wage of $15 per hour, and specifies that the real wage will rise by 2 percent in the second year of the contract. The CPI is 1.00 in the first year and 1.09 in the second year. What dollar wage must be paid in the second year?
A. $15.30
B. $16.68
C. $16.09
D. $16.45
Answer: B
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Use the following graph for the federal funds market to answer the next question.
If the Fed wants to raise the federal funds rate by one-half of a percentage point, it should ________.
A. act to increase reserves by $50 billion B. buy bonds from banks and the public C. act to reduce reserves by $50 billion D. pursue an expansionary monetary policy
According to the above figure for a gasoline market, what happens when the price per gallon of gasoline jumps from $1 to $4?
A) A gasoline surplus is replaced by a gas shortage. B) The market moves from a shortage of 40 million gallons/day to a surplus of 50 million gallons/day. C) The market shortage is replaced by market equilibrium. D) A surplus of 40 million gallons/day results.
The curve that best helps a firm determine which output level will maximize profits is the
a. total product curve b. marginal product curve c. average total cost curve d. marginal cost curve e. average variable cost curve
Winona’s government advises its citizens to save as much money as possible. What will most likely be the result of this policy?
a. little economic growth b. rapid economic growth c. unchanged economic growth d. steady economic growth