If the Price Level Rises by 4 Percent and Workersʹ

question 304

Multiple Choice

If the price level rises by 4 percent and workersʹ money wage rates increase by 2 percent, then the

• A) quantity of labor supplied increases.
• B) quantity of labor supplied does not change because there is no change in the real wage rate.
• C) quantity of labor supplied decreases.
• D) the supply curve of labor shifts rightward.

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Definitions:

Hedonist Principle

A principle suggesting that people are motivated to engage in behaviors that produce pleasure or avoid pain.

Temporal Immediacy

The perception or importance of time in the evaluation of events, suggesting that actions or events that occur closer to the present time are considered more relevant or significant.

Decision Consequences

The outcomes or impacts that follow a decision, which can be foreseen or unforeseen, positive or negative.

Self-Serving Principles

Guidelines or beliefs that are primarily aimed at benefiting oneself, often at the expense of others.