The real wage will rise if the nominal wage:
A. falls more rapidly than the general price level.
B. increases at the same rate as labor productivity.
C. increases more rapidly than the general price level.
D. falls at the same rate as the general price level.
Answer: C
You might also like to view...
GDP does not reflect
a. the value of leisure. b. the value of goods and services produced at home. c. the quality of the environment. d. All of the above are correct.
Suppose a recession occurs as a result of a negative supply shock, and instead of the economy naturally working its way back to equilibrium, the government uses policy to shift the aggregate demand curve to fight the recession. Using policy this way would
A) bring real GDP back to potential GDP more quickly but would result in a permanently higher price level. B) bring real GDP back to potential GDP more slowly but would bring the price level back to the original price level more quickly. C) quickly result in a new, higher level of real GDP and a permanently lower price level. D) bring the price level back to its original level more quickly but would result in a permanently lower level of potential GDP.