Suppose a local union has a contract that calls for the nominal wage to increase by 5 percent plus 100 percent of any increase in the CPI. If the CPI increases by 4% and there is a 1% positive bias in the inflation rate, by how much would nominal wages unnecessarily increase?

a. 9 percent
b. 1 percent
c. 5 percent
d. 3 percent
e. 4 percent


B

Economics

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If a company pays a dividend of $2 to be received one year from now, dividends are expected to grow at a rate of 3 percent per year for the indefinite future, and the interest rate is 4 percent,

the price of the company's stock should be ________ per share. A) $3.40 B) $28.57 C) $200.00 D) $340.00

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As output increases, average fixed cost

a. remains constant. b. decreases. c. rises and then falls. d. falls and then rises.

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Our model of long-run economic growth suggests that

A) the U.S. growth slowdown since 1950 has been caused largely by low saving in the U.S. B) a higher rate of saving in the U.S. cannot do much to increase the U.S. growth rate over the next two decades. C) saving in the U.S. has exceeded the golden-rule level. D) all of the above E) none of the above

Economics