When the nominal price of a good increases over time, the real cost of buying the good
A) must increase.
B) decreases because income also increases over time.
C) does not change because income also increases over time.
D) might increase, decrease, or stay the same depending on how much the CPI changed.
E) might increase, decrease, or stay the same depending on how much income changed.
D
You might also like to view...
In the short run, which of the following actions lower the interest rate?
A) a decrease in the demand for money B) an increase in the demand for money C) a decrease in the quantity of money D) a decrease in bond prices
The type of tax receipts that has shown the slowest growth since World War II has been
A) personal taxes. B) contributions for social insurance. C) taxes on production and imports. D) corporate taxes.
Assume you borrow $1,000 on credit cards at an annual interest rate of 10 percent. If the inflation rate is 12 percent during the year and the debt has to be paid back in 12 months, then:
a. income will be redistributed from you to the bank. b. the real return for the bank will be greater than initially expected. c. you will repay the bank with fewer dollars than you borrowed. d. the dollars repaid will have less purchasing power than those borrowed. e. the bank will obtain the same return on the loan as initially expected.
Which of the following might decrease the supply curve of labor?
A. Elimination of discrimination against blacks. B. Elimination of discrimination against females. C. Easing licensing requirements. D. Increasing discrimination against any group.