Inflation is troublesome to consumers because of the following effects, except
A.
Household incomes may be rising slower than the overall prices
B.
The purchasing power of people's savings would decrease
C.
Workers' wages may be rising faster than the overall price level
D.
The standard of living would fall if a household has a fixed nominal income
C.
Workers' wages may be rising faster than the overall price level
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The main result of the monetarist model is that
A) the economy is slow to adjust to sticky wages and prices. B) workers and firms have rational expectations. C) the quantity of money should be increased at a constant rate. D) productivity shocks explain fluctuations in real GDP.
Suppose that by devoting all of its resources to the production of A, the nation of Econia can produce 50 A. By devoting all of its resources to the production of B, Econia can produce 25 B. The comparable figures for the nation of Optima are 5 A and 5 B. According to the principle of comparative advantage, which nation will specialize in which product? What are the limits to the terms of trade?
What will be an ideal response?