9. A wage-price spiral can occur when: a. there is unemployment and an increase
ID: 2817065 • Letter: 9
Question
9. A wage-price spiral can occur when: a. there is unemployment and an increase in money supply. b. there is unemployment and low aggregate demand in the economy. c. there is full-employment and low aggregate demand in the economy. d. there is full-employment of resources and an increase in money supply. e. there is unemployment and a decrease in money demand. 10. Suppose an investor invests in a savings account in England one year ago. At the time of investment, the investor converted $100,000 to pounds at an exchange rate of 1.404$/£. Assume the interest rate in England was 3% and today the investor is converting his/her savings balance (principal plus interest) to dollars when the exchange rate is 1.464$/£. How much money will the investor receive? (This is NOT a multiple choice question – show your work to receive full credit.)
Explanation / Answer
Answer 9 : wage-price spiral is a situation where wage is rising and leaving more disposable income in the hand of consumer. Which lead to increase in demand of good and service causing increase in price.
Correct option is d : . there is full-employment of resources and an increase in money supply.
Answer 10 :
Amount in USD $100,000 Conversion rate 1 year ago 1.404$/£ Converted £ 71225.07 =100000/1.404 interest rate in England 3% Interest earned = 2,136.81 71227.07*3% Amount in £ after 1 year 73,361.88 (Principal + interest) exchange rate today 1.464$/£ Amount in USD 107401.79 73361.88*1.464 Hence, investor will receive = $107401.79Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.