Which of the following statements holds true for eminent domain?
(a) The costs are diverse and the benefits concentrated to those special groups who secured it.
(b) It supports rent-seeking where some individuals gain and others lose.
(c) The owner of the property secured through eminent domain has no legal recourse.
(d) It is well-defined and has been applied throughout U.S. history with consistency and accuracy
to support economic growth and development.
(b)
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Suppose expected inflation in the economy is 5%. Banks set nominal interest rates so they'll earn a 2% expected real return. Employers set nominal wages based on a 2% expected real wage increase
Suppose the nominal interest rate and nominal wages are determined this way, but actual inflation turns out to differ from the expected inflation rate. Calculate the actual real interest rate and the percent increase in the real wage for each of the following actual inflation rates: a) 2%; b) 5%; c) 10%.
Other things remaining the same, when a fall in the price of one good is followed by an increase in the demand for another good, both goods are said to be:
a. inferior goods. b. substitute goods. c. Giffen goods. d. public goods. e. complementary goods.