Suppose a Worker Signs a Contract Containing an 8 Percent

question 88

Multiple Choice

Suppose a worker signs a contract containing an 8 percent nominal wage increase with inflation expected to be 3 percent.Inflation turns out to be 6 percent,but the contract also contains 60 percent COLA protection.The worker's real wage under the contract

• A)falls by 1.2 percent.
• B)falls by 2.4 percent.
• C)rises by 3.8 percent.
• D)rises by 3.0 percent.
• E)rises by 1.8 percent.

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Definitions:

Terrible Experience

An event or situation that is extremely distressing, traumatic, or horrifying to an individual.

Defense Mechanism

A collective term for a number of reactions that try to ward off or lessen anxiety by various unconscious means.

Id

In Freudian psychoanalysis, the part of the mind that is the source of instinctual impulses and demands for immediate satisfaction of primitive needs.

Superego

A component of Sigmund Freud's psychoanalytic theory, representing the ethical and moral considerations in the personality.