Employees at the university have negotiated a 5 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 4 percent over the next year, which of the following will occur?
A) Unemployment of university employees will fall.
B) The decrease in inflation is expected.
C) Real wages for university employees will rise.
D) Inflation will be 5 percent the following year.
C
Economics
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A substitution effect of a price change is represented by:
A) movement along the same indifference curve. B) movement to a different indifference curve. C) a change in the initial budget line to a new budget line. D) a change in the slope of the initial budget line.
Economics
The peak phase of the business cycle represents
A) a temporary maximum output level of Gross Domestic Product (GDP).
B) an increase in foreign investment.
C) a labor surplus.
D) falling prices.
Economics