Because the Minimum Wage Is Not Indexed to Inflation, When

question 64

Multiple Choice

Because the minimum wage is not indexed to inflation, when there is inflation the nominal minimum wage ________, and the real minimum wage ________.

• A)remains constant; decreases
• B)remains constant; remains constant
• C)decreases; remains constant
• D)increases; decreases

---

Definitions:

Interest Payment

The amount paid by a borrower to a lender for the use of borrowed money, typically expressed as an annual percentage of the loan principal.

Journal Entry

A recording of a financial transaction in an accounting journal, indicating the accounts and amounts to be debited and credited.

Interest Expense

The cost incurred by an entity for borrowed funds; interest payments made on debt.

Contract Rate

The agreed-upon rate specified in a contract for the provision of goods or services, often discussed in the context of interest rates or wages.