Suppose Inflation Is Expected to Be 5 Percent Next Year

question 65

Multiple Choice

Suppose inflation is expected to be 5 percent next year, and you and your employer agree to a 6 percent increase in your nominal, or monetary, wage. If inflation turns out to be 5%, what is your nominal wage increase?

• A) 1 percent
• B) minus 1 percent
• C) 0 percent
• D) minus 5 percent
• E) 6 percent

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Definitions:

Acetabular Labrum

A ring of cartilage that surrounds the acetabulum (hip socket) enhancing its depth and stability, and cushioning the hip joint.

Anterior Cruciate Ligament

A key ligament located within the knee that connects the thigh bone (femur) to the shin bone (tibia), crucial for stabilizing the knee joint.

Tibia

A large bone located in the lower leg, also known as the shinbone, that bears much of the body’s weight.

Plantar Surface

The bottom part of the foot that comes in contact with the ground.