Suppose the Money Wage Rate and the Price Level Both

question 272

Multiple Choice

Suppose the money wage rate and the price level both fall by 5 percent. As a result,

• A) the quantity of labor demanded decreases.
• B) people are worse off and there is more unemployment.
• C) the quantity of labor demanded increases.
• D) the quantity of labor demanded does not change because there is no change in the real wage.

---

Definitions:

Licensing

The granting of permission by the owner of a brand, patent, or trademark to another party, allowing them to make, use, or sell a product under certain conditions.

International Markets

Markets that span across countries and continents, allowing for the trading and selling of goods and services globally.

Research and Development Costs

Expenses related to the investigation and discovery of new knowledge, products, or processes, which can improve a company's future performance and competitiveness.

Direct Ownership

A situation in which an individual or entity holds direct title to assets, such as property or stocks, without any intermediaries.