Burger King is paying $9 an hour to its workers. If the expected inflation rate equals the actual inflation rate and both are 10 percent a year, then to keep the real wage rate constant in a year the money wage rate must
A) fall to $8.10 an hour.
B) rise to $9.45 an hour.
C) rise to $10.00 an hour.
D) rise to $9.90 an hour.
E) stay at $9.00 an hour.
D
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When the output gap is positive, it represents ________ gap, and when it is negative, it represents ________ ga
A) a recessionary; an inflationary B) an inflationary; a recessionary C) an inflationary; an employment D) an employment; an unemployment E) None of the above answers is correct.
Ceteris paribus, in the long run, a negative supply shock causes
A) the long-run aggregate supply curve to shift to the left. B) unemployment to fall below its short-run level. C) equilibrium real GDP to fall. D) the price level to rise initially, and then return to its lower level.
A rightward shift in market supply curve could be caused by:
A.) An improvement in technology. B.) An increase in the market price. C.) An increase in wages. D.) The expectation that the market price will fall in the future.
An economy in which a central authority draws up a plan that establishes what will be produced and when, sets production goals, and makes rules for distribution is a
A. free-market economy. B. command economy. C. laissez-faire economy. D. public-goods economy.