As the proportion of labor contracts that index wages to prices declines, we would expect that
A) a reduction in the unemployment rate will now have a smaller effect on inflation.
B) the natural rate of unemployment will increase.
C) the natural rate of unemployment will decrease.
D) nominal wages will become more sensitive to changes in unemployment.
A
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This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
According to the graph shown, if this economy were to open to trade, the amount consumed domestically would:
A. increase by 35. B. decrease by 90. C. decrease by 35. D. increase by 90.
When poverty is defined by an absolute real income level, what will happen to the poverty rate if income per capita in a country continues to grow?
A. The poverty rate will increase forever. B. The poverty rate will increase and then decrease. C. The poverty rate will eventually be zero. D. The poverty rate will never change.