An Increase in the Money Wage Rate Shifts

question 35

Multiple Choice

An increase in the money wage rate shifts

• A)both the SAS curve and the LAS curve rightward.
• B)both the SAS curve and the LAS curve leftward.
• C)the SAS curve leftward, but leaves the LAS curve unchanged.
• D)the LAS curve rightward, but leaves the SAS curve unchanged.
• E)the SAS curve rightward, but leaves the LAS curve unchanged.

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Definitions:

Pledged

Assets or collateral that a borrower offers to a lender to secure a loan, which the lender may seize if the loan is not repaid.

Default Risk

The risk of loss to a lender from the borrower’s failure to pay the full amount due including interest and principal.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of accounts receivable, inventories, and meeting short-term liabilities.

Bank Loan

A sum of money lent by a bank to a borrower at an interest rate, which is to be repaid with interest according to the terms of the loan agreement.