What Would Happen to Prices If, for Example, All Trade

question 34

Multiple Choice

What would happen to prices if, for example, all trade unions negotiated long-term higher nominal pay and regular across-the-board increases for workers?

• A) Prices would remain unchanged.
• B) Prices would likely increase.
• C) Prices are not affected by nominal salary increases.
• D) Prices would likely decrease.

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Definitions:

CSB

Canadian Savings Bonds, a secure savings product issued and guaranteed by the Government of Canada.

Compound-Interest

A method of calculating interest where the amount is based on the initial principal and the interest that has been accumulated in past periods.

Compounded Quarterly

Involves calculating interest on an investment by adding the accrued interest back into the principal at the end of each quarter, effectively earning interest on interest.

GIC

Guaranteed Investment Certificate, a Canadian investment that offers a guaranteed rate of return over a fixed period, typically without the risk of losing the principal invested.