If the Economy Is Faced with Continued Negative Supply Shocks,such

question 40

Multiple Choice

If the economy is faced with continued negative supply shocks,such as annual wage increases for unionized workers,and there is no monetary validation,we can expect

• A)an inflationary gap.
• B)a one-time rise in the price level.
• C)rising unemployment until the wage increases cease,or are offset by other wage decreases.
• D)a shrinking output gap.
• E)peace in labour-management relations.

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Definitions:

Interest Paid

The total amount of interest payments made on borrowings (e.g., loans, bonds) during a given period.

Cash Flow Statement

A financial statement that shows the flow of cash in and out of a business during a specific period, highlighting operating, investing, and financing activities.

Accumulated Depreciation

The cumulative total of all depreciation charges applied to an asset from the time it was first used.

Common Stock

Equity ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends and capital appreciation.