Labor's Ability to Increase Nominal Wage Rates

question 56

Multiple Choice

Labor's ability to increase nominal wage rates

• A) decreases as labor's power and influence increase.
• B) increases as government policy focuses on maintaining stable prices.
• C) is unaffected by the amount of idle productive capacity.
• D) is greatest when the government attempts to reduce the unemployment rate below the natural rate.
• E) is greatest when there is perfect competition in labor markets.

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