Do not use chatgpt. Consider a country that has experienced a decline in labor demand that results in a 2 percent reduction in the equilibrium real wage.a. If the inflation rate in the country has been at zero percent, what has to happen to the nominal wage to restore labor marketequilibrium?The nominal wage will decrease by more than 2%.O The nominal wage will not change.The nominal wage will increase by 2%.The nominal wage will decrease by 2%.b. If the inflation rate in the country has been at 4 percent, what has to happen to the nominal wage to restore labor marketequilibrium?The nominal wage will not change.The nominal wage will increase by 2%.O The nominal wage will decrease by more than 2%.O The nominal wage will decrease by 2%.Which of the following is true?Workers and employers are likely to prefer a four percent inflation rate because nominal wages will be higher.Workers will prefer zero percent inflation and employers will prefer four percent inflation.Workers will prefer four percent inflation and employers will prefer zero percent inflation.○ Workers and employers are likely to prefer a zero percent inflation rate because nominal wages will be higher.

Step 1: The rate of inflation is expressed as the percentage increase in the general level of prices…

Answered: Consider a country that has experienced…

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations

Section: Chapter Questions

Problem 13P

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If inflation rises unexpectedly by 5, indicate for each of the following whether the economic actor is helped, hurt, or unaffected: A union member with a COLA wage contract Someone with a large stash of cash in a safe deposit box A bank lending money at a fixed rate of interest A person who is not due to receive a pay raise for another 11 months
How can a stagflation turn into a cost-push inflation process? A stagflation can turn into a cost-push inflation process when OA. the quantity of money persistently decreases O B. taxes consistently increase OC. the quantity of money persistently increases O D. the money wage rate decreases
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price level LRAS inflation rate (%) JA SRAS AD1 F AD2 PC AD3 quantity of output anemployment rate ) Refer to the Figure above. If the economy starts at Cand 1, then in the short run, an increase in the money supply growth rate moves the economy to OA and 1 B and 2 C and 3
A common cause of falling inflation is O Weaker growth in demand than in supply for large parts of the economy O High fees and taxes O Strong wage development O Low interest rates and rising investment
Which of the following is (are) CORRECT? O a. Unanticipated inflation benefits borrowers O b. The NAIRU for the USA is zero All of the answers are correct O d. Real interest rates are always positive
Please give just answer. There is no need to explain. i. If a country experiences high GDP and inflation, followed by a lower GDP and deflation, this is an example of O Unemployment O Recession O the Business Cycle O Supply and Demand O None of the above ji. What causes inflation? O People don't have enough money O People have too much money O People have too much money and many businesses want some of that money People owe a lot of money The government causes inflation by raising interest rates iii. The Water and Diamond Paradox explains: Why supply and demand always meets in the middle of a graph O Marginal utility of diamonds O Why water is inexpensive while diamonds are so expensive O Why water is so expensive while diamonds are inexpensive O None of the above iv. The unemployment rate is: O The number of people who don't want to work The number of people who are working but don't want to work The number of people who don't want to work and are not working The number of people who…
Oil prices are on track to reach $100 a barrel this month for the first time in 2023 after surging by almost 30% sinceJune, after Russian and Saudi Arabian production cuts and rising demand from China.With many industries being heavily reliant on energy and transportation, what type of inflation would this leadto in South Africa?A. Demand-pull inflationB. Cost-push inflationC. StagflationD. HyperinflationWhat is one of the potential effects of the aforementioned inflation on the South African economy?A. Decreased purchasing power of money.B. Increased consumer savings.C. Reduced interest rates on loans.D. Higher demand for imports.
Which of the following correctly shows the steps needed to calculate the inflation rate? O Tally up the cost of the basket of goods and services, subtract the value of goods and services that are no longer counted in the basket, and then calculate the inflation rate. Collect prices from the stores where people shop, assess the substitution that people make from low inflation to high inflation products, and calculate the difference in the prices that people pay. O Find out what people typically buy, collect the prices from the stores where people shop, tally up the cost of the basket of goods and services, and calculate the inflation rate. O Find the total value of the basket of goods and services, assess quality changes from one period to the next, and measure the inflation rate.
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Interest rates were lower in the mid-1980s than in the late 1970s, yet many economists have commented that real interest rates were actually much higher in the mid- 1980s than in the late 1970s. Consider the diagram to the right that shows the nominal interest rate and the inflation rate. The real interest rate: A. was negative from the early 1980s until about 2002 and then it became positive. OB. was higher in 2005 than 1985, when the real interest rate was negative. OC. was higher in 1985 than 2005, when the real interest rate was zero. OD. tends to fall when the inflation rate falls. Money, I Nominal Interest Rate (6 mo. T-bill), Inflation Rate (%) ܣ ܣ ܐ ܣ ܣ ܘ ܗ ܗ ܬ ܝ ܬ ܣ 14- 13- 12- 11- 1980 Nominal Interest Rate- Inflation Rate 1985 1990 1995 Year 2000 2005 p> 2010 Q
Suppose there's an unanticipated increase in the rate of inflation. Which of the following is likely to be true? Select one: a. Workers whose nominal wages are set at the beginning of the year are likely to suffer a decrease in real wages. O b. Workers whose nominal wages are set at the beginning of the year are likely to enjoy an increase in real wages. The real value of outstanding loan balances of debtors will increase. O d. Creditors who made loans based on the anticipated rate of inflation will earn a higher real interest rate than they expected.

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