Which of the Following Correctly Explains Why Real Wages May

question 43

Multiple Choice

Which of the following correctly explains why real wages may vary in the short run?

• A) Workers usually prefer inflexible nominal wage agreements.
• B) Since wage bargaining is costless, firms and workers negotiate new wages frequently.
• C) The level of inflation in most economies is stable.
• D) In most industries, nominal wage adjustment is instantaneously linked to inflation.

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Definitions:

Cash Received

The money that a business or individual receives during a specific period, including revenues from sales, services, loans, or investments.

Safety Stock

Extra inventory kept on hand to prevent stockouts due to unpredictable demand or delays in supply.

Budgeted Overhead

The estimated cost of all overhead expenses that are planned or expected to be incurred over a specific period.

Ending Inventory

The total value of all inventory a company has in stock at the end of its fiscal period, valuable for calculating cost of goods sold and gross profit.