If the price level in an economy turns out to be higher than that expected by workers and firms, firms _____
Fill in the blank(s) with the appropriate word(s).
increase the quantity supplied more than the economy's potential output.
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The U.S. supply curve of dollars is upward-sloping because a:
a. higher number of yen per dollar means Japanese goods are cheaper in Japan. b. higher number of yen per dollar means Japanese goods are cheaper in the U.S. c. lower number of yen per dollar means Japanese goods are cheaper in the U.S. d. none of these.
If rapid population growth reduces the amount of capital per worker, thereby lowering labor productivity, it is referred to as:
a. age dependency. b. capital budgeting. c. investment diversion. d. capital disinvestment. e. capital shallowing.
Payroll tax is a proportional tax
a. True b. False Indicate whether the statement is true or false
If the nominal interest rate is 4 percent and expected inflation is 2.5 percent, then what is the expected real interest rate?
a. 1.6 percent b. 10 percent c. 6.5 percent d. 1.5 percent