If Workers and Employers Agree to a Three-Year Wage Contract

question 52

Multiple Choice

If workers and employers agree to a three-year wage contract under the expectation of 3% inflation, and inflation turns out to be 5%, then:

• A)workers gain and employers gain.
• B)workers gain and employers lose.
• C)workers lose and employers gain.
• D)workers lose and employers lose.

---

Definitions:

Normal Balance

The side (debit or credit) of an account that is typically increased; for assets and expenses, it's a debit; for liabilities, equity, and revenue, it's a credit.

Debit

An entry recorded on the left side of an account in bookkeeping, indicating an increase in assets or expenses or a decrease in liabilities, equity, or income.

T Account

A T Account is a visual representation used in accounting to depict the debit and credit transactions affecting a particular account.

Credit Side

The credit side of an account in double-entry bookkeeping is where decreases in assets or expenses or increases in liabilities, equity, and income are recorded.