Behavioral economists have discovered that people view a 2% decrease in their income without inflation as unfair, but a 3% increase in their income in the presence of 5% inflation as fair. What are the nominal and real rates of change in their incomes? What tendency is leading people to feel like the pay decrease is unfair

Behavioral economists have discovered that people view a 2% decrease in their income without inflation as unfair, but a 3% increase in their income in the presence of 5% inflation as fair. What are the nominal and real rates of change in their incomes? What tendency is leading people to feel like the pay decrease is unfair

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter17: Stabilizing The National Economy

Section: Chapter Questions

Problem 24AA

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