Suppose an Employer and Its Employees Enter into a Wage

question 90

Multiple Choice

Suppose an employer and its employees enter into a wage contract specifying a wage increase of 2 percent. But suppose that the price level rises by 3 percent over the course of the contract. In this case,

• A)the employer will experience a greater fall in purchasing power than would have occurred if the price level had held steady.
• B)both employer and employees will benefit from increased purchasing power.
• C)the employees' purchasing power will fall.
• D)both employer and employees will experience a loss of purchasing power.
• E)the employees' purchasing power will rise.

---

Definitions:

Foundation

An underlying basis or principle for something, often referring to the solid base upon which structures are built.

Blastocyst

A structure formed in the early development of mammals, consisting of a sphere of cells enclosing a fluid-filled cavity and a cluster of cells from which the embryo develops.

Zygote

The initial cell formed when a sperm cell fertilizes an egg cell, marking the beginning of pregnancy.

Observable Characteristics

Traits or features of an organism that can be seen or measured directly.