1. According to the wage-price spiral, if a company gives a worker a raise in pay, then they increase the price of their products. 2. When the actual inflation rate is lower than expected, lenders win and borrowers lose, because the real interest rate is greater than expected. 3. When the supply of a product or service goes down and the demand stays the same the Price will typically fall 4. The fundamental economic concept that describes the total amount of a specific good or service that is available to consumers is called supply. 5. Book value of a fixed asset is equal to: Cost - Salvage value. 6. With an interest rate of 8% compounded semiannually, the value of a $1000 investment after 5 years is most nearly ($1840). 7. The calculation of depreciation using the declining-balance method ignores salvage value in determining the amount to which a constant rate is applied. 8. Inflation occurs whenever the price level falls continuously over a period of time. 9. When the supply of a product or service goes down and the demand stays the same the Price will typically fall. 10. To earn as much interest as possible, you should open a savings account that earns simple interest and has the highest interest rate.

1. According to the wage-price spiral, if a company gives a worker a raise in pay, then they increase the price of their products. 2. When the actual inflation rate is lower than expected, lenders win and borrowers lose, because the real interest rate is greater than expected. 3. When the supply of a product or service goes down and the demand stays the same the Price will typically fall 4. The fundamental economic concept that describes the total amount of a specific good or service that is available to consumers is called supply. 5. Book value of a fixed asset is equal to: Cost - Salvage value. 6. With an interest rate of 8% compounded semiannually, the value of a $1000 investment after 5 years is most nearly ($1840). 7. The calculation of depreciation using the declining-balance method ignores salvage value in determining the amount to which a constant rate is applied. 8. Inflation occurs whenever the price level falls continuously over a period of time. 9. When the supply of a product or service goes down and the demand stays the same the Price will typically fall. 10. To earn as much interest as possible, you should open a savings account that earns simple interest and has the highest interest rate.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter16: Measuring The Cost Of Living

Section: Chapter Questions

Problem 9PA

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11 which of the following is a macroeconomic * decision or concent the unemployment rate for the entire economy the price of oil O the unemployment rate for a firm O how many television sets to produce O
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3. 2019 2020 Price $2.50 $6.00 Quantity Price $3.00 $6.60 Quantity Nuts 40 tons 38 tons Berries 50 tons 52 tons a. Calculate the Consumer Price Index (CPI) for 2020 and the inflation rate for 2020. b. If the nominal wage was $22.5 for both 2019 and 2020 – what is the real wage in 2020? c. If the real rate of interest is 2% and expected inflation is 4% over the next year, what nominal interest rate will the banker charge on a one-year loan? If at the end of year, the actual rate of inflation is 13%, what will be the real rate of interest the banker realizes on the loan described? Why is this outcome harmful to an economy? d. Briefly, what is the substitution bias and how does it affect the CPI?
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Because the minimum wage is not indexed to inflation, when there is inflation thenominal minimum wage. and the real minimum wage. A. remains constant; remains constant B. None of the above OC. increases; decreases D. remains constant; decreases OE. decreases; remains constant