If you negotiated a salary based on an anticipated inflation rate of 4 percent, and the actual inflation rate turned out to be 6 percent
A) your employer would have gained at your expense.
B) your real wage will increase, but your nominal wage will decrease.
C) the purchasing power of your wages will not change, since purchasing power is based on your nominal wage.
D) the purchasing power of your real wages would be more than you anticipated.
A
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When the population increases with no change in labor productivity, employment ________ and potential GDP ________
A) decreases; decreases B) increases; increases C) decreases; increases D) increases; decreases
Refer to Figure 27-5. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely pursue
A) contractionary automatic stabilizers. B) expansionary fiscal policy. C) contractionary fiscal policy. D) expansionary monetary policy. E) contractionary monetary policy.