If nominal income increases by 4 percent and the price level increases by 3 percent, real income must:
A. decrease by 1 percent.
B. decrease by 7 percent.
C. increase by 1 percent.
D. increase by 7 percent.
Answer: C
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When actual real GDP is equal to the natural real GDP, the unemployment rate is
A) zero. B) at its "natural" rate. C) accelerating. D) decelerating.
Refer to Figure 13.3. If exchange rates are floating, fiscal policy designed to reduce the federal deficit and the typical Fed response to the change in inflation caused by the fiscal policy would best be represented by a movement from ________ in
panel (a) and a corresponding movement from ________ in panel (b). A) point A to point D; point X to point Y B) point C to point B; point X to point Y C) point D to point A; point Y to point X D) point B to point C; point Y to point X
Government intervention
a. can provide incentives to conduct business in an illegal black market b. plays no role in generating wealth c. is the best way to eliminate poverty d. does not enforce property rights
The demand curve for a product can be derived from consumer equilibrium by:
a. altering the prices of all other products. b. altering consumer incomes. c. shifting consumer preferences. d. altering the price of the good itself. e. knowing the demand curves for all other products.