Employees at the University Have Negotiated a 5 Percent Increase

question 205

Multiple Choice

Employees at the university have negotiated a 5 percent increase in wages for the next year,based on their inflation expectations.If inflation is actually 6 percent over the next year,which of the following will occur?

• A)Unemployment of university employees will rise.
• B)Real wages for university employees will fall.
• C)Inflation will be 5 percent the following year.
• D)The increase in inflation is expected.

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Definitions:

Less Developed Country

A country with a lower level of industrialization, usually accompanied by lower living standards and lower HDI (Human Development Index) scores.

Expropriation

The act of a government taking privately owned property, either with compensation or without compensation, for public use.

Nonconvertible Currency

A currency that cannot be freely converted into other currencies on the foreign exchange market due to foreign exchange regulations.

Globalization

The process of interaction and integration among people, companies, and governments worldwide, often characterized by global trade and cultural exchange.