Workers and firms both expect that prices will be 2.5% higher next year than they are this year. As a result
A) workers will be willing to take lower wages next year, but not lower than a 2.5 percent decrease.
B) aggregate demand will increase by 2.5%.
C) the purchasing power of wages will rise if wages increase by 2.5%.
D) the short-run aggregate supply curve will shift to the left as wages increase.
D
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Some costs cannot be varied within a given time period. These costs are called
A. overheads. B. total costs. C. fixed costs. D. variable costs.
The short-run aggregate supply (SRAS) curve represents the relationship between
A. the price level and the real Gross Domestic Product (GDP) without full adjustment or full information. B. the price level and the nominal Gross Domestic Product (GDP). C. the price level and the real Gross Domestic Product (GDP) without full adjustment but with full information. D. the decisions of producers and the decisions of consumers.
Refer to the diagrams. The case of an inferior good is represented by figure:
A. A.
B. B.
C. C.
D. D.
Neoclassical economics assumes that people have the following characteristics, except:
A. They are stable and definite in their tastes and preferences B. They are good at assessing future options as they are in assessing current ones C. They are driven by their pursuit of maximum satisfaction D. They care deeply about fairness and are often generous