If Workers Realize That an Increase in Nominal Wage Rates

question 18

Multiple Choice

If workers realize that an increase in nominal wage rates does not necessarily constitute a rise in real wages, then we would expect:

• A)an increase in employment.
• B)a decrease in employment.
• C)a downward movement along the Philips curve.
• D)a rightward shift of the Phillips curve.
• E)a leftward shift of the Phillips curve.

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Definitions:

Cost Price

The total cost incurred to produce or purchase an item before any markup or selling expenses are added.

Operating Expense

Expenditures that a business incurs through its normal business operations.

Operating Profit

Earnings before interest and taxes (EBIT), representing the profit a business makes from its operations.

Selling Price

The amount for which a product or service is sold to the customer.