When All Prices Rise in Equal Proportion,including the Prices of Goods

question 14

Multiple Choice

When all prices rise in equal proportion,including the prices of goods and inputs,

• A) one moves along the same vertical LRAS curve,from a lower to a higher point,and the real wage rate and the labour market remain unaffected.
• B) the real wage rate and the labour market remain unaffected,and the real price of capital and the capital market remain unaffected.
• C) one moves along the same vertical LRAS curve,from a lower to a higher point,the real wage rate and the labour market remain unaffected,and the real price of capital and the capital market remain unaffected.
• D) the real wage rate and the labour market remain unaffected,the real price of capital and the capital market remain unaffected,and the real prices of other inputs and their markets remain unaffected.
• E) one moves along the same vertical LRAS curve,from a lower to a higher point,the real wage rate and the labour market remain unaffected,the real price of capital and the capital market remain unaffected,and the real prices of other inputs and their markets remain unaffected.

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Definitions:

Zinc

A chemical element with the symbol Zn and atomic number 30, often used for galvanizing iron and steel to protect against rust.

Copper

A chemical element with symbol Cu and atomic number 29, known for its high thermal and electrical conductivity.

Production Function

A mathematical representation describing the relationship between input factors and the output of goods or services.

Inputs

The resources used in the production process, including labor, capital, materials, and energy.