What will tend to happen to wages if workers and employers foresee inflation?
a. Both parties will seek to reduce nominal wages and therefore keep real wages the same.
b. Nominal wages will remain constant but real wages will increase to avoid the effects of inflation.
c. Inflation erodes purchasing power of workers, and real wages are unchanged.
d. Nominal wages will increase by an amount that keeps real wages constant.
d
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The 12 regional Federal Reserve Banks
A. are not allowed to make loans to banks in their districts. B. regulate banks in their districts. C. have more voting members on the FOMC than does the Board of Governors. D. are each headed by a member of the Board of Governors.
A price elasticity of demand of 2.3 implies
a. Demand is inelastic b. Demand is elastic c. Demand is unitary elastic d. Demand is perfectly elastic