Increases in Nominal Wages in the Economy Are Generally the Effect

question 64

Multiple Choice

Increases in nominal wages in the economy are generally the effect of which force(s) ?

• A)output-gap effect
• B)expectational effect
• C)supply-shock inflation
• D)output gap effect plus expectational effect
• E)output gap effect plus expectational effect minus supply-shock inflation

---

Definitions:

Favorite Bundle

An individual consumer's most preferred combination of goods and services, given their budget and prices.

Indifference Curve

A graph showing different combinations of two goods among which a consumer is indifferent, depicting levels of consumption where the consumer has no preference for one bundle over another.

Absolute Values

Mathematical values expressed without regard to their sign; distances from zero on the real number line.

Favorite Bundle

The combination of goods and services that maximizes a consumer's utility given their budget constraint.