If the Nominal Wage Rises from €10 Per Hour in Period

question 17

Multiple Choice

If the nominal wage rises from €10 per hour in period one to €15 per hour in period 2 as the expected price level rises from 1 to 3 while the actual price level rises from 4 to 5, then from period 1 to period 2:

• A)the nominal wage is rising.
• B)the expected real wage is rising.
• C)the actual real wage is falling.
• D)all of the above.

---

Definitions:

Profit-Maximizing

A strategy or process by which a firm determines the price and output level that returns the greatest profit.

Loss-Minimizing

A strategy or point where a firm attempts to reduce its losses to the lowest possible level when it cannot achieve profitability.

Efficient Output Level

The quantity of production that maximizes a firm's profit by equating marginal cost and marginal revenue.

Units

A standard quantity or amount used as a measure of a physical quantity, such as length, mass, or time.