If workers realize that an increase in nominal wage rates does not necessarily constitute a rise in ...

If workers realize that an increase in nominal wage rates does not necessarily constitute a rise in real wages, then we would expect:
 a. an increase in employment.
  b. a decrease in employment.
  c. a downward movement along the Philips curve.
  d. a rightward shift of the Phillips curve.
  e. a leftward shift of the Phillips curve.

Question 2

If the demand curve for X has twice the elasticity of the demand curve for Y, then for the same percentage decrease in price, the percentage increase in the quantity of X demanded would be twice that for Y.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 3

A bank's assets consist of 1,000,000 in total reserves, 2,100,000 in loans, and a building worth 1,200,000 . Its liabilities and capital consist of 3,000,000 in demand deposits and 1,300,000 in capital. If the required reserve ratio is 10 percent, what is the level of the bank's excess reserves? How much could it loan out as a result?
 a. 700,000; 700,000
 b. 700,000; 7,000,000
  c. 300,000; 300,000
 d. 300,000; 3,000,000

Question 4

If the percentage increase in nominal wage rates is less than the percentage increase in the price level, then:
 a. real wage rate rises and the unemployment rate falls.
  b. both real wage rate and the unemployment rate rises.
  c. both real wage rate and the unemployment rate falls.
  d. real wage rate rises and the unemployment rate remains unchanged.
  e. both real wage rate and the unemployment rate remains unchanged.

Question 5

If Pizza Hut decreases its price for a large pizza by 25 and this leads to a 75 increase in sales, we can conclude that demand is relatively elastic with regard to price over that range.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 6

A bank's assets consist of 500,000 in total reserves, 1,600,000 in loans, and a building worth 1,200,000 . Its liabilities and capital consist of 2,000,000 in demand deposits and 1,300,000 in capital. If the required reserve ratio is 30 percent, what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?
 a. zero; zero
 b. 50,000; 50,000
 c. 50,000; 500,000
 d. The bank has insufficient reserves to meet its reserve requirements.

Question 7

The actual rate of inflation is equal to the expected rate of inflation along the:
 a. downward-sloping Phillips curve.
  b. upward-sloping aggregate supply curve.
  c. horizontal aggregate supply curve.
  d. downward-sloping aggregate demand curve.
  e. vertical Phillips curve.

Question 8

If a huge percentage change in price leads to a small percentage change in quantity demanded, then demand is said to be inelastic.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 9

A bank's assets consist of 500,000 in total reserves, 1,600,000 in loans, and a building worth 1,200,000 . Its liabilities and capital consist of 2,000,000 in demand deposits and 1,300,000 in capital. If the required reserve ratio is 25 percent, what is the level of the bank's excess reserves? How much money could the excess reserves be used to create in the banking system as a result?
 a. zero; zero
 b. 500,000; 500,000
 c. 500,000; 2,000,000
  d. 250,000; 1,000,000

Question 10

When the reservation wage is adjusted to account for a higher inflation rate:
 a. the aggregate demand curve shifts to the right.
  b. the price level falls.
  c. the short-run Phillips curve shifts outward.
  d. production costs of businesses decline.
  e. the aggregate supply curve shifts to the right.