If an increase in inflation is expected, which of the following ...

[809779]

If an increase in inflation is expected, which of the following events is the least likely to occur?
 a. There will be an upward movement along the long-run Phillips curve.
  b. Nominal GDP will increase.
  c. Nominal wage rates will increase at the same rate as expected inflation.
  d. A worker's reservation wage will rise at the same rate as expected inflation.
  e. Unemployment rate will increase.

Question 2

Prices have soared for parking facilities in downtown Dallas in recent months. Pressure from voters has convinced the Dallas City Council to impose a price ceiling of 5 on all parking garages and lots per day. What effect will this likely have on the market for parking spaces in Dallas? Who will gain? Who will lose?

[rachel]

Answer to Question 1

e

Answer to Question 2

The 5 price ceiling will likely result in a shortage of parking spaces. At the new lower prices, quantity demanded will increase. More people will wish to park downtown, and both the parking lots/garage owners and the consumers who can't find spaces to park in will lose. Owners will lose revenue and in some cases shut down lots and garages. Consumers who can find a space without much added time spent searching may initially be better off, but will most likely spend more time searching for a space. Some will find no space at all.