The real wage equals the nominal wage ________ the CPI, all times 100

If you own a bond with a six percent coupon rate and new bonds are paying six percent, what will happen to your bond's market price?

What will be an ideal response?

In the rational expectation model, government control over aggregate demand: a. gives it the power to alter real output and employment even when the effects of government policies are expected. b. can affect real output in the short-run only if policies are unexpected

c. has potential to change long-run real output as long as the aggregate supply curve is vertical. d. has highly unpredictable effects on real output in the long run.