If Wages Are Not as Flexible as Prices, an Increase

question 28

Multiple Choice

If wages are not as flexible as prices, an increase in money growth will lead to

• A) an increase in inflation and a rise in real long-run GDP growth.
• B) an increase in inflation but no rise in real short-run GDP growth.
• C) an increase in inflation and in firms' profits.
• D) no change in inflation, but a fall in firms' profits.

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Definitions:

Developmental Process

The sequence of biological, cognitive, and socioemotional changes that humans undergo from birth throughout their lives.

Distinct Stages

refers to the separate and clearly differentiated phases within a process or development.

Timing

The selection of the precise moment for doing something for optimum effect, such as delivering a punchline or making a decision.

Teratogen

is any substance or agent that can cause congenital anomalies or increase the incidence of an anomaly in a population.