In the Short-Run, a Rise in the Money Wage Rate

question 344

Multiple Choice

In the short-run, a rise in the money wage rate leads to

• A) an increase in the price level, but no change in real GDP.
• B) an increase in the price level and an increase in real GDP.
• C) no change in the price level, but an increase in real GDP.
• D) an increase in the price level and a decrease in real GDP.

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Definitions:

American Federalism

A political system in which power is divided between a central authority and constituent political units (states), allowing both to enact laws within their respective areas of responsibility.

State Governments

The governing bodies of individual states within a federal system, responsible for local legislation and administration.

Fundamental Governing

The basic rules and principles that guide the operations of a government or organization.

Commerce Clause

A provision in the United States Constitution that grants Congress the power to regulate commerce with foreign nations, and among the several states and with the Indian tribes.