Higher Consumer Prices Caused by External Forces Would Boost the Wage

question 136

Multiple Choice

Higher consumer prices caused by external forces would boost the wage costs of firms without any commensurate increase in the nominal demand for their products if

• A)long-term contracts were in force.
• B)all labor contracts were one year in duration.
• C)there were no COLAs.
• D)there were full COLA protection.

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Definitions:

Credits

Credits refer to a bookkeeping entry that increases a liability or equity account, or reduces an asset or expense account, reflecting the opposite side of a debit.

Assets

Assets are resources owned or controlled by a business, expected to bring future economic benefits.

Liabilities

Financial obligations or debts owed by a company to outside parties, including loans, accounts payable, and mortgages.

Credit Balance

Credit Balance refers to the amount of money a company owes to its customers, creditors, or depositors in their respective accounts.