In the cost-push model of inflation, increases in nominal-wage rates that exceed increases in the productivity of labor:
A. Increase aggregate supply and the price level in the economy
B. Increase aggregate supply and decrease the price level in the economy
C. Decrease aggregate supply and the price level in the economy
D. Decrease aggregate supply and increase the price level in the economy
D. Decrease aggregate supply and increase the price level in the economy
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Which of the following statements about "inside information" is FALSE?
A) It is information that is not available to the general public. B) It is illegal to knowingly use inside information when trading stocks. C) Profits can be made using inside information. D) The government never imposes fines or other penalties for abuse of inside information.
Which of the following statements is true?
A) Price ceilings set below the equilibrium price cause shortages. B) Surpluses result when a price floor is set above the equilibrium price. C) Price ceililngs set above the equilibrium price cause surpluses. D) Price ceilings are set by the market and price floors are set by the government. E) ?a and b
Suppose Country A, a labor-abundant country, produces only drink and furniture. The following equations illustrate the prices and costs of drink and furniture in the country, where the numbers indicate the amounts of labor and land needed to produce a unit of drink and furniture. 'W' is the wage rate and 'r' is the rental rate of land.Price of drink = 1w + 2rPrice of furniture = 2w + 1rAccording to this information, which of the following statements is true?
A. Labor is used relatively intensively in the production of furniture. B. The opportunity cost of producing furniture is higher than the opportunity cost of producing drink in Country A. C. The inputs are used in the same proportion in producing both commodities. D. The land to labor ratio in the production of furniture is higher than that in the production of drink.
Suppose current government spending increases and that individuals expect future government spending to increase. Given this information, in which of the following cases will output in the current period be more likely to decrease?
A) Individuals consider only the short run effects of changes in future macro variables when forming expectations of future output and future interest rates. B) Individuals consider only the medium run effects of changes in future macro variables when forming expectations of future output and future interest rates. C) Individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates. D) The output effects will be the same in B and C.