If the Favorable Supply Shocks of the 1990s Were Reversed

question 190

Multiple Choice

If the favorable supply shocks of the 1990s were reversed in the future, we should expect a(n)

• A)increase in inflation and unemployment.
• B)decrease in inflation and unemployment.
• C)increase in inflation and a decrease in unemployment.
• D)decrease in inflation and an increase in unemployment.

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Definitions:

Industrial Unions

Unions that organize workers across various trades and crafts within an industry to conduct collective bargaining.

Craft Unions

Labor unions representing workers with specific skills or crafts, often in the same or related industries.

Nominal Wages

Wages that are paid to workers in current dollars, without adjustment for inflation.

Price Level

A measure of the average of current prices across the entire spectrum of goods and services produced in the economy.