During Periods of Low Inflation

question 26

Multiple Choice

During periods of low inflation:

• A) It is easier to pass price increases through the channel.
• B) Manufacturers, wholesalers, and retailers rarely face built-in cost pressures.
• C) It becomes more difficult to pass price increases through the channel.
• D) Increasing prices to offset cost pressures is more feasible.
• E) Members of the channel are less sensitive to higher prices.

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Definitions:

Minimum Wage

The lowest legal hourly wage that workers can be paid by employers, a measure aimed at protecting workers from unduly low pay.

Equilibrium Market Wage

The wage rate at which the quantity of labor supplied equals the quantity of labor demanded in a particular market.

Bricklayers

Skilled tradespeople who lay bricks, blocks, and other types of building components to construct or repair walls, partitions, arches, and other structures.

Compensating Differentials

Wage differences across jobs that reflect the fact that some jobs are less pleasant or more dangerous than others.