-The Trends Displayed in the Table Can Best Be Explained

question 5

Multiple Choice

-The trends displayed in the table can best be explained by

• A)the nominal wage rate has increased at a rate about equal to the inflation rate.
• B)the real wage rate has increased at a rate about equal to the inflation rate.
• C)service industries have increased as a proportion of the economy and they tend to have higher nominal wage rates.
• D)the inflation rate has been rising over the time period.
• E)None of the above can explain the trends in the figure.

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Definitions:

New Common Shares

Issuance of additional shares of a company's stock, which can dilute existing shareholders' equity but raise new capital for the company.

Flotation Cost

The total costs that a company faces when it issues new securities, including underwriting fees, legal fees, and registration fees.

Retained Earnings

Cumulative net earnings not distributed as dividends to shareholders, but instead reinvested in the business.

Inflation

The pace at which prices for goods and services across the board go up, diminishing the value of money.