Suppose the Money Wage Rate and the Price Level Both

question 89

Multiple Choice

Suppose the money wage rate and the price level both fall by 5 percent. As a result

• A) the quantity of labor demanded increases.
• B) the quantity of labor demanded decreases.
• C) the quantity of labor demanded does not change because there is no change in the real wage.
• D) people are worse off and there is more unemployment.

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Definitions:

Political Speech

Political speech involves expressions related to governmental, political processes, or public policies, often protected under freedom of speech rights to encourage democratic debate.

Corporation

A form of business organization that is owned by owners, called shareholders, who have no inherent right to manage the business, and is managed by a board of directors that is elected by the shareholders.

Takings Clause

Part of the Fifth Amendment of the U.S. Constitution, stating that private property cannot be taken for public use without just compensation.

Eminent Domain

A governmental power whereby the government can take or condemn private property for a public purpose on the payment of just compensation.