Your grandfather tells you that his annual income increased at an average rate of eight percent over his lifetime. He complains, however, that the average inflation rate of three percent reduced his ability to buy all the things he could have purchased if inflation had been zero. You respectfully tell your grandfather that he is committing the _____, because his annual income would have increased
at an average rate of only five percent if inflation had been zero.
Fill in the blank(s) with correct word
inflation fallacy
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A difference in wages that reflects differences in the nonpay features of two jobs is called
a. a compensating differential. b. a wage adjustment. c. an efficiency wage. d. a minimum wage.
As bookings for his catering business began to increase, David raised his rates. Then he decided to take on even more bookings than he had before. Which of the following describes his labor supply curve?
a. U-shaped b. upward sloping c. downward sloping d. backward bending
Diminishing marginal returns occur in the short run.
Answer the following statement true (T) or false (F)
Social Security contributions are
A. a voluntary dollar amount that people contribute towards Social Security. B. mandatory taxes partially paid out of workers' wages and salaries. C. entirely paid by your employer. D. collected only from people earning more than $120,000 a year.