In the Cost-Push Model of Inflation, Increases in Nominal-Wage Rates

question 219

Multiple Choice

In the cost-push model of inflation, increases in nominal-wage rates that exceed increases in the productivity of labor

• A) increase aggregate supply and the price level in the economy.
• B) increase aggregate supply and decrease the price level in the economy.
• C) decrease aggregate supply and the price level in the economy.
• D) decrease aggregate supply and increase the price level in the economy.

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Definitions:

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