If the inflation rate in an economy is 5 percent and the income earned by workers increases by 5 percent, then _____
a. nominal income declines and real income increases
b. both nominal income and real income increase by 5 percent
c. nominal income increases and real income declines
d. both nominal income and real income decrease by 5 percent
e. nominal income increases by 5 percent and real income is unchanged
e
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What will happen to the equilibrium price and equilibrium quantity of ice cream cones when consumers' incomes decrease?
A) If ice cream cones are a normal good, then the equilibrium price and quantity of ice cream cones will decrease. B) If ice cream cones are a normal good, then the equilibrium price and equilibrium quantity of ice cream cones will increase. C) If ice cream cones are an inferior good, then the equilibrium price for an ice cream cone will increase and the equilibrium quantity of ice cream cones will decrease. D) If ice cream cones are an inferior good, then the equilibrium price and quantity of ice cream cones will decrease.
Nations specialize when they _____.
(A) Produce certain goods and services more efficiently than other nations. (B) Export more than they import. (C) Have few natural resources and are required to endure a trade deficit. (D) Import more than they export.