Gretchen Expects the Price Level to Rise from 104 This

question 32

Multiple Choice

Gretchen expects the price level to rise from 104 this year to 108 next year,and she is able to incorporate these expectations into her wage contract.If the price level rises to 106 next year instead of 108,which of the following will occur?

• A)Gretchen's real wage will be unchanged.
• B)Gretchen's real wage will fall.
• C)Gretchen's real wage will rise.
• D)Gretchen's real wage may rise or fall,depending on the unemployment rate.

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Definitions:

Nutrition

The process of providing or obtaining the food necessary for health and growth.

Worms

Invertebrate animals with a long, soft body without limbs, found in many environments.

Birds Depend

The ecological principle that birds' survival and reproductive success depend on various environmental factors.

Union

An association or amalgamation of individuals or groups for a common purpose, often used in the context of labor organizations or the act of joining.