Suppose That the Real Wage Remained Unchanged Between Year 1

question 82

Multiple Choice

Suppose that the real wage remained unchanged between year 1 and 2 but the nominal wage increased from $20 to $24.What is true about the price level?

• A)It rose by 20 percent.
• B)It rose by 25 percent.
• C)It remained unchanged.
• D)It fell by 10 percent.
• E)It fell by 20 percent.

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Definitions:

Domestic Corporations

Corporations that are incorporated and operate within the legal boundaries of a particular country, subject to that country's laws and regulations.

Deferred Income Tax Liability

A tax obligation due in the future for income already earned and recognized for accounting purposes.

Operating Income

Income generated from the regular operating activities of a business, excluding revenues and expenses from non-operating sources like investments.

Income Tax Rate

The rate at which a person or business pays taxes on their earnings.