Gretchen expects the price level to rise from 104 this year to 108 next year, and she is able to incorporate these expectations into her wage contract. If the price level rises to 106 next year instead of 108, which of the following will occur?
A) Gretchen's real wage will be unchanged.
B) Gretchen's real wage may rise or fall, depending on the unemployment rate.
C) Gretchen's real wage will fall.
D) Gretchen's real wage will rise.
D
Economics
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To achieve allocative efficiency, an economy
A) must produce on its PPF. B) does not necessarily need to be production efficient. C) must have increases in technology. D) might leave some resources unemployed. E) can produce either on or within its PPF.
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In Keynes's liquidity preference framework, individuals are assumed to hold their wealth in two forms
A) real assets and financial assets. B) stocks and bonds. C) money and bonds. D) money and gold.
Economics