If the Price Level Rises by 4 Percent in a Year

question 110

Multiple Choice

If the price level rises by 4 percent in a year and nominal wages increase by 2 percent, then real wages will

• A)decrease by 6 percent.
• B)decrease by 4 percent.
• C)decrease by 2 percent.
• D)increase by 2 percent.

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Definitions:

Control

In the context of financial reporting, control refers to the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.

Shareholding

The ownership interest represented by holding shares of stock in a company.

Subsidiaries

Companies that are controlled by another company, known as the parent company, through the ownership of more than half of their voting stock or through other control mechanisms.

Directors

Individuals appointed or elected to oversee the management and make strategic and policy decisions for a corporation or organization.