The Table Below Shows Data for Five Economies of Similar

question 25

Multiple Choice

The table below shows data for five economies of similar size.Real GDP is measured in billions of dollars.Assume that potential output for each economy is $340 billion.
TABLE 24-1
-Refer to Table 24-1.Which of the following statements explains why wages are rising in Economy E?

• A)The inflationary gap generates lower profits for firms because workers are demanding higher wages.
• B)The inflationary gap generates excess demand for labour,which causes wages to rise.
• C)The aggregate supply curve is shifting to the right,which is causing wages to rise.
• D)The aggregate demand curve is shifting to the right,causing wages to rise.
• E)Potential output is rising,putting upward pressure on wages.

Understand the treatment of foreign currency gains and losses in financial statements.

Analyze the impact of foreign operations on corporation's financial statements through consolidation and translation.

Learn about foreign exchange market’s impact on accounting practices.

Understand the accounting implications of natural hedges in managing foreign exchange risk.

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Definitions:

Total Revenue

The income generated from the sale of goods or services before any costs are subtracted.

Price Changes

Variations in the cost of goods or services in the market over a period of time, influenced by factors such as supply and demand.

Income Elasticity

A measure of how much the demand for a good or service changes in response to changes in consumer income.

Inferior Good

A type of good whose demand decreases when consumers' income increases, opposite to normal goods.