Workers and Firms Both Expect That Prices Will Be 3

question 275

Multiple Choice

Workers and firms both expect that prices will be 3% higher next year than they are this year.As a result

• A)workers will be willing to take lower wages next year.
• B)the purchasing power of wages will rise if wages increase by 3%.
• C)the short-run aggregate supply curve will shift to the left as wages increase.
• D)aggregate demand will increase by 3%.

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Definitions:

Increase

An upward movement in quantity, value, or some measure of performance.

Revenues

Revenues refer to the income that a business generates from its normal business operations, typically from the sale of goods and services to customers.

Owner's Capital

The amount of equity a business owner has invested in the company, reflecting the difference between the company's assets and liabilities.

Credit Balance

A condition where the sum of credits in an account exceeds the sum of debits, often signaling a net liability or income.