Average Wages in Canada Have Increased Each Year Since the Second

question 79

Multiple Choice

Average wages in Canada have increased each year since the Second World War, even though the economy has experienced some severe recessions during this time. The explanation for this continued increase in nominal wages is

• A)the existence of powerful labour unions in Canada.
• B)a continued shortage of labour.
• C)that wage effects of the inflationary gaps outweigh the wage effects of the recessionary gaps.
• D)that the actual unemployment rate is consistently below the NAIRU.
• E)the persistent expectation that the price level will increase.

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