Moving Along the Potential GDP Line, When the Price Level

question 66

Multiple Choice

Moving along the potential GDP line, when the price level changes, the
I. real wage rate stays at the full-employment equilibrium level.
Ii. money wage rate changes by the same percentage.
Iii. money prices of non-labor resources change by the same percentage.

• A)iii only
• B)i and ii
• C)i only
• D)i, ii, and iii
• E)ii only

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Definitions:

Hypothesis

A conception or proposition that is tentatively assumed and then tested for validity by comparison with observed facts and by experimentation.

Scientific Explanation

A logical and systematic description that aims to interpret and clarify phenomena based on empirical evidence and scientific methodologies.

Hypothesis

A proposed explanation for a phenomenon, made as a starting point for further investigation.

Hypothesis

A suggested explanation for an observed event, intended as an initial point for more detailed research.