Suppose your nominal income this year is 5 percent higher than last year. If the inflation rate for the period was 3 percent, then your real income was:
a. increased by 1.67 percent.
b. increased by 2 percent.
c. increased by 8 percent.
d. decreased by 0.6 percent.
b
You might also like to view...
Assume a money multiplier of 4 and a government expenditure of $20 million. If the Treasury borrows $20 million from the banking system while the banks have excess reserves, the money supply will
A) rise by $5 million. B) rise by $20 million. C) rise by $80 million. D) not be affected.
Which of the following exemplifies an opportunistic behavior by a franchisor arising out of incompleteness or ambiguity in a contract?
a. Providing inferior service in an attempt to cut operating costs. b. Terminating a well-operated franchisee and converting the establishment into a profitable company-owned outlet. c. Fixing exorbitant prices for products having relatively elastic demand. d. Terminating a franchisee who had been using the company brand name to endorse products that the agreement says it cannot.
An increase in human capital would lead to
a. a decrease in the standard of living b. an upward shift of the production function c. a decrease in productivity d. cutbacks in government skill-training programs e. a decrease of the capital stock
If Federal Reserve officials attempt to pull the economy out of a recession when the price level is relatively stable, the policies they would most likely use would be to:
a. Buy government securities and increase the discount rate b. Sell government securities and decrease the discount rate c. Buy government securities and decrease the discount rate d. Sell government securities and increase the discount rate