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 workers' productivity causes inflation, which in turn increases workers' productivity.
c. A decrease in prices causes workers to demand higher wages, which in turn puts additional downward pressure on prices.
d. An increase in the price level lowers real wages leading to unemployment. This in turn puts downward pressure on prices.
a
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Macroeconomics involves the study of the decision-making of individual firms or individuals
Indicate whether the statement is true or false
Using the Rule of 70, if China's current growth rate of real GDP per person was 7 percent a year, how long would it take the country's real GDP per person to double?
A) 35 years B) 14 years C) 10 years D) 49 years