If nominal wage rates are contractually determined and cannot change in the short run, then an unexpected increase in the inflation rate will:
a. increase business profits and reduce the unemployment rate.
b. reduce both business profits and the unemployment rate.
c. reduce business profits and increase the unemployment rate.
d. increase both business profits and the unemployment rate.
e. cause no change in business profits or the unemployment rate
a
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The costs affecting decisions to supply are always
A) accounting costs. B) marginal costs. C) past costs. D) per unit costs. E) non-taxable costs.
If Second National Bank has more rate-sensitive liabilities then rate-sensitive assets, it can reduce interest rate risk with a swap that requires Second National to
A) pay fixed rate while receiving floating rate. B) receive fixed rate while paying floating rate. C) both receive and pay fixed rate. D) both receive and pay floating rate.
A central tenet of the position against policy activism is that
A) consumption spending is highly unstable. B) consumption spending is highly stable. C) aggregate policies have little effect on consumption. D) instability in private consumption will always be offset by variations in other elements of private spending.
Economies of scale are created by greater efficiency of capital and by:
a. longer chains of command in management. b. better wages for labor. c. smaller plant sizes. d. increased specialization of labor.