Assuming That as a Result of Observed Past Increases in the Aggregate

question 23

Multiple Choice

Assuming that as a result of observed past increases in the aggregate price level,workers' expectation of the current price level rises.Then,

• A)less labor will be supplied at each money wage because with the higher expectation about the aggregate price level since a given money wage corresponds to a lower real wage.
• B)the firm has to pay a higher money wage in order to obtain a given quantity of labor.
• C)more labor will be supplied at each money wage because with the higher expectation about the aggregate price level since a given money wage corresponds to a higher real wage.
• D)Both a and b
• E)Both b and c

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