In Which of the Following Situations Would an Individual Experience

question 110

Multiple Choice

In which of the following situations would an individual experience an increase in real wages?

• A) Receiving a 5 percent increase in nominal wages while inflation was 6 percent
• B) Taking a 3 percent cut in nominal wages while deflation was 4 percent
• C) Taking a 1 percent cut in nominal wages while inflation was 1 percent
• D) Receiving a 3 percent increase in nominal wages while inflation was 3 percent
• E) Receiving no increase in nominal wages while inflation was 0 percent

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Definitions:

Option Expiration

The date on which an options contract becomes void and the holder no longer has rights for which it provides.

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Strike Price

The predetermined price at which an option can be exercised, allowing the holder to buy (in the case of a call option) or sell (in the case of a put option) the underlying security.

Puts

Options contracts giving the owner the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.