Workers and Firms Both Expect That Prices Will Be 4

question 53

Multiple Choice

Workers and firms both expect that prices will be 4% higher next year than they are this year. As a result:

• A)workers will be willing to take lower wages next year.
• B)the purchasing power of wages will rise if wages increase by 4%.
• C)the short-run aggregate supply curve will shift to the left as wages increase.
• D)aggregate demand will increase by 4%.

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Definitions:

Established Firm

A company or business entity that has been operational and active in its industry for a considerable period, indicating stability and experience.

Ambidextrous Organization

An organization capable of efficiently managing and exploiting existing competencies while simultaneously exploring and innovating new opportunities.

Organic

In organizations, refers to structures or processes that are flexible, adaptable, and decentralized; in agriculture, pertains to farming practices that avoid synthetic chemicals.

Modular Organization

A flexible organizational structure where components or modules can be easily assembled, reassembled, added, or removed to adapt to changing demands.