Which of the following statements refers to the wage-price spiral process?
(A) The salary of a worker fluctuates with the amount of sales he or she accomplishes per month.
(B) Employees only receive a raise when their purchasing power has been eroded by inflation.
(C) An employee loses his or her job, finds a position at another company, and is underemployed.
(D) A worker receives a raise, which increases costs for the employer.
Ans: (D) A worker receives a raise, which increases costs for the employer.
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How do the owners of a partnership relate to the business?
A) The owners and the business are separate legal entities. B) The owners and the business are not separate legal entities. C) The assets of the owners are considered separate from the asset of the business. D) None of these describe the legal relationship of the owners to the business.
Mainstream economists think that:
A. Market participants change their actions in response to anticipated price-level changes such that no change in real output occurs B. The economy self-corrects when unanticipated events divert it from its full-employment level of real output C. The downward inflexibility of wages and prices may leave the economy stuck in a costly recession for long periods D. Significant changes in technology and resource availability cause macroeconomic instability