The reason that inflation rarely harms workers is that
A. wages rise at the same time prices rise.
B. wages fall when prices rise.
C. nominal income falls as prices rise.
D. the minimum wage rate automatically rises when the price level rises.
Answer: A
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When a recession ends
A) the household sector decreases spending substantially. B) firms increase the amount of borrowing. C) interest rates decrease. D) households decrease spending on durable goods.
When Pepsi becomes more expensive relative to other beverages, people will purchase less Pepsi. This observation is known as the:
a. diamond-water paradox. b. law of diminishing marginal utility. c. substitution effect. d. income effect.
When externalities exist, economic efficiency is achieved when marginal private benefit equals marginal private cost
a. True b. False Indicate whether the statement is true or false
If you put a $20 bill in the pocket of your winter coat at the beginning of spring so that you will be surprised when you find it again next winter, you are using money as:
A. a medium of exchange. B. a store of value. C. bank reserves. D. a unit of account.