Economists assume that most individuals act as if they are motivated by self-interest and respond in predictable ways to changing circumstances

Suppose workers expect the inflation rate to be 3.6 percent and they receive a nominal wage increase of 7.5 percent. If the actual inflation rate turns out to be 2.8 percent, workers will receive a lower real wage than expected

a. True b. False Indicate whether the statement is true or false

Which of the following would not interfere with market equilibria?

a. a minimum wage b. a rent control c. a non-binding price floor d. a binding price ceiling