Suppose in Country X, anticipating high inflation in the economy, wages of workers are increased in the beginning of a financial year. However, prices remain unchanged during the year. Everything else remaining constant, which of the following will be observed in this economy?
a. The cost of labor, that is the real wage will decline
b. The current profits of the firm will rise
c. Aggregate supply in the economy will increase
d. Annual production in the economy will remain unaffected
e. The aggregate supply curve will move to the left
e
Economics
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Explain why individual firms in competitive markets face more elastic demand curves than the market as a whole
What will be an ideal response?
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Price discrimination requires the firm to
a. separate customers according to their willingnesses to pay. b. differentiate between different units of its product. c. engage in arbitrage. d. use coupons.
Economics