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

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Definitions:

Capital Stock

The total amount of shares that a company can issue as authorized by its corporate charter, representing ownership in the company.

Redeemed Stock

Shares that have been bought back or repaid by the issuing company.

Financial Leverage

Financial leverage is the use of borrowed funds to increase the potential return of an investment, magnifying both potential gains and potential losses.