If the Real Wage Needs to Decrease to Restore Equilibrium

question 80

Multiple Choice

If the real wage needs to decrease to restore equilibrium in a labour market,this can happen by

• A) keeping the nominal wage constant and allowing deflation to allow the real wage to decline.
• B) keeping the nominal wage constant and allowing inflation to allow the real wage to decline.
• C) raising the nominal wage and allowing deflation to allow the real wage to decline.
• D) raising the nominal wage so long as there is no inflation occurring in the economy.

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Definitions:

Average Cycle Time

The average duration it takes to complete a process from start to finish, often used in manufacturing and project management.

Total Processing Time

The complete amount of time required to finish a task or process from start to end.

Value Of Goods

The monetary worth assigned to products, determined by factors such as market demand, production costs, and competitive pricing.

Just-In-Time System

The Just-In-Time System is an inventory management philosophy aimed at decreasing waste and increasing efficiency by receiving goods only as they are needed in the production process, thereby reducing inventory costs.