When Considering the Effects of Widespread Wage Indexing

question 32

Multiple Choice

When considering the effects of widespread wage indexing

• A)one has to distinguish between demand shocks and supply shocks
• B)one always comes to the conclusion that they are ill-suited to protect against the loss of purchasing power
• C)one quickly realizes the benefits arising from less real wage rate rigidity
• D)one realizes that it is very hard to tie nominal wages to a specific price index
• E)none of the above

---

Definitions:

Process Costing System

An accounting method used to assign costs to units of production in continuous processes, where similar items are produced.

Weighted-Average Method

An inventory costing method that assigns the cost of goods available for sale based on the weighted average cost of those goods during the period.

Processing Department

A processing department is a division within a manufacturing operation where a specific type of process or series of operations is performed on products.

Cost System

A method or process used by a company to capture, measure, and allocate costs to products, services, or other cost objects.