If the Nominal Wage Rises by 4 Percent and the Price

question 302

Multiple Choice

If the nominal wage rises by 4 percent and the price level rises by 7 percent, the real wage will

• A) be unaffected.
• B) rise by 3 percent.
• C) fall by 3 percent.
• D) rise by 11 percent.

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Definitions:

Disbursements

Money paid out by a business or organization for various purposes, including expenses, investments, and dividends.

Average Daily Receipts

The average amount of cash that a business receives on a daily basis, calculated over a specific period.

Cheques

Written, dated, and signed instruments that direct a bank to pay a specific sum of money to the bearer or a designated party.

Clearing Times

The time period it takes for a financial transaction to be processed and settled.