Real income will fall whenever:
A. wages increase faster than prices.
B. wages increase and prices stay the same.
C. prices and wages increase at the same rate.
D. prices increase faster than wages.
Answer: D
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Which of the following shifts both short-run and long-run aggregate supply to the left?
a. a decrease in the actual rate of inflation b. a decrease in the expected rate of inflation c. a decrease in the capital stock d. a drought in the Midwest agricultural areas.
Those economists who argue that the European Union is not a true optimal currency area cite _______________ and __________________ as justifications for this position
A) differences in culture; decreased labor mobility B) differences in language; culture C) decreased labor mobility; language differences D) none of the above
A change in the interest rate changes the demand for loanable funds.
Answer the following statement true (T) or false (F)
Which of the following is an example of The Big Squeeze?
A. High profits attract new entrants, which increases supply, and drives down prices. B. High profits drive out businesses, which increases supply, and drives up prices. C. High profits drive out businesses, which increases supply, and drives down prices. D. High profits attract new entrants, which increases supply, and drives up prices.