Workers and Firms Both Expect That Prices Will Be 2

question 124

Multiple Choice

Workers and firms both expect that prices will be 2.5% higher next year than they are this year.As a result

• A)workers will be willing to take lower wages next year,but not lower than a 2.5 percent decrease.
• B)the purchasing power of wages will rise if wages increase by 2.5%.
• C)the short-run aggregate supply curve will shift to the left as wages increase.
• D)aggregate demand will increase by 2.5%.

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Definitions:

Greek Philosophers

Thinkers from ancient Greece who are known for their foundational contributions to philosophy, including ethics, metaphysics, and logic.

Concept

An abstract idea or a general notion that represents understanding, thought, or a complex element of something.

Inequality

The unequal distribution of resources, rights, and opportunities among individuals or groups in society.

Benefit

An advantage or profit gained from something.