If Workers Actively Demand Pay Increases When the Price Level

question 101

Multiple Choice

If workers actively demand pay increases when the price level is rising and are willing to accept pay cuts when the price level is falling,then the short-run aggregate supply curve would be

• A) negatively sloped.
• B) nearly vertical.
• C) nearly horizontal.
• D) positively sloped as usual.
• E) always shifting to the right or the left.

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Definitions:

Equity Multiplier

A financial leverage ratio that shows the proportion of a company's assets that are financed by shareholder's equity.

Earnings Per Share

A financial metric that indicates the portion of a company's profit allocated to each outstanding share of common stock, providing an indicator of the company's profitability.

Price-Earnings Ratio

is a measure of a company's current share price relative to its per-share earnings, used to evaluate if a stock is undervalued or overvalued.

Times Interest Earned

A financial ratio that measures a company's ability to meet its interest payments on outstanding debt, calculated by dividing earnings before interest and taxes (EBIT) by the interest expense.