On a diagram where the interest rate and the quantity of money demanded are shown on the vertical and horizontal axes respectively, the total demand for money can be found by:
A. horizontally adding the transactions and the asset demand for money.
B. vertically subtracting the transactions demand from the asset demand for money.
C. horizontally subtracting the asset demand from the transactions demand for money.
D. vertically adding the transactions and the asset demand for money.
A. horizontally adding the transactions and the asset demand for money.
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Suppose a worker signs a contract containing an 8 percent nominal wage increase with inflation expected to be 3 percent. Inflation turns out to be 6 percent, but the contract also contains 60 percent COLA protection
The worker's real wage under the contract A) falls by 1.2 percent. B) falls by 2.4 percent. C) rises by 3.8 percent. D) rises by 3.0 percent. E) rises by 1.8 percent.
There are circumstances under which the corporation tax is equivalent to an economic profits tax.
A. True B. False C. Uncertain