If the Inflation Rate Is 5 Percent and You Receive

question 89

Multiple Choice

If the inflation rate is 5 percent and you receive a wage increase of 5 percent,

• A)your nominal income declines but your real income increases
• B)both your nominal income and your real income increase by 5 percent
• C)your nominal income increases but your real income declines
• D)both your nominal income and your real income decrease by 5 percent
• E)your nominal income increases by 5 percent but your real income is unchanged

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Definitions:

Insightful Approach

A method or strategy characterized by the ability to understand complex or hidden aspects of a problem, leading to a novel solution.

Labor Law

The body of laws, administrative rulings, and precedents which address the legal rights of, and restrictions on, working people and their organizations.

Employer Needs

The requirements or demands of employers that need to be met for operational success, including staffing, productivity, and regulatory compliance.

Employee Needs

The requirements and desires of employees in the workplace, including fair compensation, safe work environments, and respect.