Suppose the Economy Includes Two Distinct Groups of People: Wage

question 97

Multiple Choice

Suppose the economy includes two distinct groups of people: wage earners and goods sellers.If the price level increases by 50 percent and nominal wages remain unchanged,

• A) there will be no redistribution of purchasing power because all private wage earners in the U.S.economy receive indexed wages
• B) real wages will remain the same because nominal wages do not change
• C) there will be no redistribution of purchasing power because only changes in real income can change the distribution of income
• D) income will be redistributed from wage earners to goods sellers
• E) income will be redistributed from goods sellers to wage earners

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Definitions:

Convergence

In communication and social psychology, convergence refers to the process by which individuals adjust their communicative behaviors to be more similar to their communication partners, promoting understanding and rapport.

Reconciles

The process of making one belief, fact, or action compatible with another, often involving the resolution of differences and restoration of harmony.

Relationship Role

The function or part played by an individual within a relational context, often defined by social, cultural, or organizational norms and expectations.

Task Role

A behavioral pattern or role adopted by an individual within a group that aims at achieving the group's goals and tasks.