If the Price Level Rises by 4 Percent in a Year

question 35

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:

Specific Performance

A legal remedy that compels a party to execute their part of a contract, rather than providing monetary compensation for failing to fulfill the contract terms.

Reformation

The process of making changes to a legal document or contract to correct errors or misrepresentations.

Condition Precedent

A clause in a contract that requires a specific event or action to take place before the contract becomes binding on the parties involved.

Clause

A specific provision or section in a legal document or contract that details a particular condition, requirement, or aspect of the agreement.