Sticky nominal wages can result in
a. lower profits for firms when the price level is lower than expected.
b. a decrease in real wages when the price level is lower than expected.
c. a short-run aggregate-supply curve that is vertical.
d. a long-run aggregate-supply curve that is upward-sloping.
a
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Suppose that Canada pegs its currency to the U.S. dollar at a rate of $C1 = $US1 and that Canada is a major exporter of crude oil to the United States. The increase in the price of oil that occurred in the second half of 2007 is likely to:
A) cause Canada to adopt a contractionary monetary policy and the United States to adopt an expansionary monetary policy. B) cause Canada to adopt an expansionary monetary policy and the United States to adopt a contractionary monetary policy. C) cause both Canada and the United States to adopt contractionary monetary policies. D) cause both Canada and the United States to adopt expansionary monetary policies.
When Jamie purchases a classic 1968 Plymouth Cuda convertible from Shane, GDP
A) does not change, because the car was not produced this year. B) increases, because the car is a durable good and increases consumption. C) increases, because the car is a durable good and increases investment. D) does not change, because Jamie did not buy the car from a dealershi