If workers and employers base their wages on an inflation forecast that turns out to be correct...
What will be an ideal response?
neither workers nor employers gain or lose from the inflation
You might also like to view...
Perfect competition exists in a market if
A) there are many firms producing an identical product. B) there are many firms producing a similar product, each of which may have unique features. C) the firm is protected by a barrier to entry. D) the firm is always at the break-even point where it is earning only a normal profit.
A railroad company lays a line of track between Houston and Dallas. It provides daily service for industrial customers and ships 5,000 ton-miles per day with a single train and only one departure and arrival at each end
It has an opportunity to purchase a second train that would allow it to ship twice the amount of ton-miles per day. Does this firm face increasing, constant or decreasing returns to scale? Explain.