Real income will rise from one year to the next if nominal income
A. rises and the price level rises faster.
B. falls and the price level falls faster.
C. falls faster than the price level.
D. falls and the price level rises.
Answer: B
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Which one of the following is most likely to reduce the mobility of labor between jobs?
a. an increase in the minimum wage b. legislation relaxing licensing requirements for entry into many occupations c. the taxation of unemployment compensation in the same manner as income from other sources d. both b and c above
The nominal exchange rate is 90 Pakistani rupees per dollar. The price of a shirt in Pakistan is 1800 rupees. The same shirt sells for $25 in the U.S. A. What is the real exchange rate? Show your work. B. Can arbitragers make a profit? C. If your answer to C is yes, where would they buy and where would they sell?