If an Increase in Inflation Is Expected, Which of the Following

question 97

Multiple Choice

If an increase in inflation is expected, which of the following events is the least likely to occur?

• A)Unemployment will remain constant.
• B)Nominal GDP will increase.
• C)Nominal wage rates will increase at the same rate as expected inflation.
• D)A worker's reservation wage will rise at the same rate as expected inflation.
• E)Nominal wage rates will remain constant.

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Definitions:

Net Income

The final amount of money a company earns, after deducting all its costs including taxes and operational expenses, from its total income.

Accrued Revenue

Revenue earned in one accounting period but not received until a later period, representing money owed to a business for goods or services provided.

Adjusting Journal Entries

Accounting entries made at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

Net Income

The total profit of a company after all revenues and gains are added and all expenses and losses are subtracted.