4) Inflation will reduce workers' real wage and so decrease the number of available workers. Thisoutcome is desirable whendemand for workers declines and the worker are reluctant to have a cut in theirnominal wage.demand for workers increases and the workers are reluctant to have a cut in theirnominal wage.demand for workers declines and the workers are willing to have a cut in their nominalwage.demand for workers increases and the workers are willing to have a cut in theirnominal wage.

A market is a place where the buyers and sellers interact with each other and the exchange of goods…

Answered: 4) Inflation will reduce workers' real…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider the following information about SUNY tuition: year 1980 2016 SUNY tuition $900 $6470 CPI 86 243 What is the growth rate of nominal tuition during this period? What is the growth rate of real tuition during this period? What is the rate of inflation during this period? What can you conclude about the real cost of college attendance?
3) Suppose workers and firms expect the overall price level to increase by 4%. Given this information, we would expect that: A) the real wage will decrease by 4%. B) the real wage will increase by 4%. C) the nominal wage will increase by less than 4%. D) the nominal wage will increase by more than 4%. E) the nominal wage will increase by exactly 4%.
Which one of the following statements about the bargaining power of workers and the nominal wage is INCORRECT? (a) An increase in unemployment benefits may result in an increase in the nominal wage; (b) If workers expect prices to increase, they will bargain for a higher nominal wage; (c) The easier it is to replace a worker, the more bargaining power such workers have; (d) Given that labour is the only production factor used, an increase in the bargained nominal wage will not lead to an increase in the real wage.
1. Calculating inflation using a simple price index Consider a fictional price index, the College Student Price Index (CSPI), based on a typical college student's annual purchases. Suppose the following table shows information on the market basket for the CSPI and the prices of each of the goods in 2019, 2020, and 2021. The cost of each item in the basket and the total cost of the basket are shown for 2019. Perform these same calculations for 2020 and 2021, and enter the results in the following table. Notebooks Calculators Large coffees Energy drinks Textbooks Total cost Price index Price Cost Price Quantity in Basket (Dollars) (Dollars) (Dollars) 10 15 50 7 1 100 100 150 1 150 50 2 100 10 100 1,000 5 5 5 5 Suppose the base year for this price index is 2019. Between 2019 and 2020, the CSPI increased by 2019 1,400 100 110 1 3 120 5 5 2020 Cost (Dollars) In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Price (Dollars) 11 140 1 4 150 5 5 %.…
Q.3.1In a country with a population of 100 million people there are 20 million children under the age of 15 years, 50 million employed, 27 million unemployed and 3 million full time students. Calculate the unemployment rate Q.3.2 Explain, with the aid of a graph, the demand‐pull inflation
q22- If there is inflation Select one: a. production is rising but prices are held constant b. the CPI is falling c. real GDP grows faster than nominal GDP d. nominal GDP grows faster than real GDP
Unanticipated inflation Unanticipated inflation penalises: A. those earning incomes that are taxed in nominal terms B. those who hold cash C. those who lend money at a fixed interest rate D. those earning incomes that are taxed in nominal terms, those who hold cash and those who lend money at a fixed interest rate
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If you are hired by an organization, you would be least hurt by inflation if Group of answer choices The government increases social security retirement payments in anticipation of expected inflation If your employer provides fixed annual increases in salaries and benefits in the employment contract You increase savings in your bank account in anticipation of expected rise in inflation Your employer has a cost-of-living adjustment clause in the employment contract
Consider a simple economy that only produces: pencils, t-shirts, and bananas. Using the information in the table below, calculate the inflation rate for 2020, as measured by the consumer price index. Product Pencils T-shirts Bananas 1.9% 1.1% O-1.1% 1.5% O-1.9% Quantity 8 15 5 Base year price (2010) $2 $5 $1 Price (2019) $3 $7 $1.50 Price (2020) $3.50 $6.75 $1.75
Question 40 Deflation a) is the same as disinflation; it means the rate of inflation has fallen. b) will make you better off if your nominal wages fall more slowly than prices. c) automatically implies that, on average, everyone is better off because prices have fallen. d) will make you better off if your nominal wages fall more rapidly than prices. e) will make you better off if your real wages fall more rapidly than prices.
A consequence of unanticipated inflation in an economy is that:Group of answer choices the rate of economic growth reaches a maximum. the risks of investing in a business increase. the level of productive activities in the economy increases. the allocation of resources in the economy becomes efficient.

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