Author Question: When the economy's actual price level exceeds the expected price level in the short run: a. the ... (Read 165 times)

cherise1989 · **on:** Jun 30, 2018

When the economy's actual price level exceeds the expected price level in the short run:
a. the real wages of workers decline.
b. the nominal wages of workers increase.
c. firms decrease output below the potential level.
d. the economy produces the natural rate of output.
e. cyclical unemployment in the economy falls to zero.

Question 2

Other things constant, if the interest rate rises, people prefer to hold:
a. less money because the opportunity cost of holding money has increased.
b. more money because the opportunity cost of holding money has increased.
c. less money because the opportunity cost of holding money has declined.
d. more money because the opportunity cost of holding money has declined.
e. the same amount of money because the opportunity cost of holding money is zero.