If nominal wage rates increase by 5 percent per year and the price level increases by 3 percent per year, which of the following is correct?
a. Real wages will increase by 2 percent per year.
b. Real wages will increase by 3 percent per year.
c. Real wages will decrease by 3 percent per year.
d. Real wages will decrease by 2 percent per year.
e. Real wages will remain constant.
a
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Which of the following is an example of the wealth effect during a period of inflation?
A. A firm receives a fixed price for the services it sells while the price level is rising B. You hold money in a savings account that earns 5 percent interest while the price level doubles C. Your income stays constant while the price level doubles D. You pay for utilities that are becoming more expensive as the price level is rising
If you are asked how much a 2-week vacation in Jamaica is worth, which function of money will you base your answer on?
A. Medium of exchange B. Store of value C. Standard of deferred payment D. Standard of value
The increasing availability of temporary job placement agencies and online job services has ________ the efficiency of matching workers and jobs, and has therefore ________ the natural rate of unemployment in the United States.
A. decreased; increased B. increased; increased C. increased; decreased D. decreased; decreased
The geographical distribution of resources such as skilled labor has little effect on firm location decisions
Indicate whether the statement is true or false