Suppose That a Country's Workers Are Universally Protected by COLAs

question 161

Multiple Choice

Suppose that a country's workers are universally protected by COLAs and an adverse SAS shock,occurs.After wage and price adjustments,ceteris paribus,we find

• A)output falls dramatically and unemployment rises.
• B)real wages decline and unemployment rises.
• C)real wages rise and unemployment falls.
• D)none of the above

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Definitions:

Average Rate

Typically refers to the mean rate or typical value for a given measure over a set time period or dataset.

Returns

The gain or loss on an investment over a specified period, typically expressed as a percentage of the investment's initial cost.

Years

Units of time representing a period of approximately 365 days or 12 months, commonly used to measure durations and intervals in financial contexts.

Real Rate of Return

The annual percentage return realized on an investment, which is adjusted for changes in prices due to inflation or other external effects.