Author Question: If nominal wage rates increase by 2 percent per year and the price level increases by 5 percent per ... (Read 25 times)

a0266361136 · **on:** Jun 30, 2018

If nominal wage rates increase by 2 percent per year and the price level increases by 5 percent per year, real wages will:
a. increase by 3 percent per year.
b. increase by 5 percent per year.
c. increase by 2 percent per year.
d. decrease by 5 percent per year.
e. decrease by 3 percent per year.

Question 2

Suppose an individual can earn 3 percent interest on an annual term deposit. His opportunity cost of holding 100,000 in cash instead of investing in the term deposit will be:
a. 3,300.
b. 330.
c. 1,000.
d. 6,000.
e. 3,000.