If Workers Do Not Believe That Policymakers Are Serious About

question 38

Multiple Choice

If workers do not believe that policymakers are serious about fighting inflation,they are most likely to push for higher wages,which will ________ aggregate ________ and lead to unemployment or inflation or both,everything else held constant.

• A)decrease;demand
• B)increase;demand
• C)decrease;supply
• D)increase;supply

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Definitions:

Balance of Payments Surplus

A situation in which the total amount of money coming into a country from abroad exceeds the total amount of money going out.

Monetary Inflow

The entry of money into a country, organization, or institution, typically influencing its financial health positively.

Monetary Outflow

This term refers to the flow of money out of a country, business, or institution, primarily through payments to other countries or purchases of goods and services.

Comparative Advantage

The ability of a country, individual, company, or region to produce a good or service at a lower opportunity cost than competitors, leading to more efficient trade patterns.