If a Private Wage Contract Is Agreed Upon with a Cost

question 190

Multiple Choice

If a private wage contract is agreed upon with a cost of living adjustment such that wage hikes are equal to increases in the CPI,

• A)the employer benefits because wages will rise less than the change in actual prices.
• B)workers exactly keep pace with changes in the cost of living.
• C)workers benefit because the CPI increases more rapidly than does the cost of living.
• D)the CPI bias means that workers benefit if the price level rises and the employer benefits if the price level falls.
• E)the CPI bias means that workers benefit if the price level falls and the employer benefits if the price level rises.

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Definitions:

Clavicle

A bone located in the shoulder region, known as the collarbone, which serves as a strut between the shoulder blade and the sternum.

Humerus

The humerus is the long bone in the upper arm, extending from the shoulder to the elbow.

Radius

A bone in the forearm that extends from the lateral side of the elbow to the thumb side of the wrist, also refers to the half-length of a circle's diameter.

Tibia

The inner and typically larger of the two bones between the knee and the ankle in vertebrates, parallel with the fibula.