Which of the following correctly describes a wage-price spiral?
a. An increase in nominal wages causes inflation, and inflation causes workers to demand even higher wages in order to keep their real income constant. This cycle can repeat itself.
b. An increase in real wages due to growth in worker productivity causes inflation, which in turn increases worker productivity.
c. A decrease in prices causes workers to demand higher wages, which in turn puts additional downward pressure on prices.
d. None of the above.
a
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By making most of its employees owners of the company, United Airlines attempted to
A) cope with the unlimited liability problem. B) change its business organization from a corporation to a partnership. C) address the principal-agent problem between the workers and managers. D) increase the role of the command system in managing the firm.
Workers whose skills become obsolete as a result of technological change are often paid a lower wage as a result of
a. natural ability. b. geographic location of employment. c. chance. d. work effort.