Which of the following statements would you DISAGREE with Explain why ? 1. Higher than anticipated inflation increases the real wage rate ( adjusted for inflation ) and workers gain at the expense of employers who lose. 2. The consequences of anticipated inflation include transaction costs tax consequences and increased uncertainty. 3. if the nominal interest rate is 10 percent the inflation rate is 6 percent and the tax rete is 20 percent the real after tax interest rate is 1 .5 percer 4. If the money wage rate is $25.00 an hour and the price level is 125 the real wage rate is $20.00.
Which of the following statements would you DISAGREE with Explain why ? 1. Higher than anticipated inflation increases the real wage rate ( adjusted for inflation ) and workers gain at the expense of employers who lose. 2. The consequences of anticipated inflation include transaction costs tax consequences and increased uncertainty. 3. if the nominal interest rate is 10 percent the inflation rate is 6 percent and the tax rete is 20 percent the real after tax interest rate is 1 .5 percer 4. If the money wage rate is $25.00 an hour and the price level is 125 the real wage rate is $20.00.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Which of the following statements would you DISAGREE with Explain why ?
1. Higher than anticipated inflation increases the real wage rate ( adjusted for inflation ) and workers gain at the expense of employers who lose.
2. The consequences of anticipated inflation include transaction costs tax consequences and increased uncertainty.
3. if the nominal interest rate is 10 percent the inflation rate is 6 percent and the tax rete is 20 percent the real after tax interest rate is 1 .5 percer
4. If the money wage rate is $25.00 an hour and the price level is 125 the real wage rate is $20.00.
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