If the Price Level Rises by 2 Percent and Workers

question 195

Multiple Choice

If the price level rises by 2 percent and workers' money wages increase by 2 percent, then the

• A) quantity of labor supply decreases.
• B) quantity of labor supply increases.
• C) quantity of labor supplied does not change because there is no change in the real wage rate.
• D) More information about the dollar change in the price level and money wage rate are needed to answer the question.

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Definitions:

Equity Securities

Financial instruments that represent ownership interest in a company, such as stocks.

Debt Securities

Financial instruments representing money borrowed that must be repaid, such as bonds, bills, or notes.

Model Business Corporation Act

A model set of laws prepared by legal experts to guide states in the development of their corporate statutes.

Shares

Units of ownership in a corporation or financial asset that represent an equal proportion of its capital.