Suppose there is a 3 percent increase in the nominal wages of workers in an economy. The annual rate of inflation in the economy is about 6 percent. Which of the following is true in this case?
a. Real wages would fall by about 3 percent
b. Real wages would increase by about 20 percent.
c. Real wages would fall by about 25 percent.
d. Real wages would increase by about 50 percent.
e. Real wages would increase by about 10 percent.
a
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According to ________, when real GDP is ________ percentage points greater than potential GDP, the unemployment rate is one percentage point ________ the natural unemployment rate
A) Okun's Law; four; below B) Keynes' Law; two; below C) Phillip's Law; four; above D) Say's Law; two; above E) Okun's Law; two; below
Requiring commercial banks to hold reserves equal to some fraction of their deposit liabilities
A) acts as a constraint on bank lending. B) is an alternative for banks that choose not to use the gold standard. C) is without significance since banks are not required to meet their liabilities on demand by depositors. D) prevents runs on banks by depositors who fear that the banks may not have assets equal to their liabilities. E) really has no effect on the monetary system today.
Refer to Scenario 10.5. How many garden hoses should be produced in California in order to maximize profits?
A) 1 B) 2 C) 3 D) 4 E) 5
Accounting profits are total revenues minus
A) all relevant opportunity costs. B) explicit and implicit costs. C) explicit costs and all other relevant opportunity costs. D) explicit costs.