Recently, a Teachers' Union Argued That the Standard of Living

question 29

Multiple Choice

Recently, a teachers' union argued that the standard of living of teachers working for the school district was falling. The negotiating team for the school board replied that this was not true because
The teachers had received significant increases in nominal income through collective bargaining.
Could the union statement be correct?

• A) No, because real income may rise if price increases are proportionately greater than the increases in nominal income.
• B) Yes, because real income may fall if price increases are proportionately smaller than the increases in nominal income.
• C) Yes, because real income may fall if price increases are proportionately greater than the increases in nominal income.
• D) No, because real income may rise if price increases are proportionately greater than declines in nominal income.

---

Definitions:

Purchased Component

A part or material acquired from an external supplier for use in the manufacturing or assembly process of a product.

Work-In-Process

Refers to partially finished goods that are in the process of being manufactured but are not yet complete.

Master Production Schedule

A detailed plan that outlines exactly what products and quantities will be produced and at what time to meet customer demand.

Phantom Bills

Artificial or virtual bills of materials used in manufacturing and inventory management to simplify complex assemblies and their processes.