If Workers Push for Wages That Are Beyond What Productivity

question 2

Multiple Choice

If workers push for wages that are beyond what productivity gains can justify ________.

• A)a positive output gap ensues which will lead to lower unemployment if the Federal Reserve does not act
• B)a temporary negative supply shock ensues driving up prices
• C)and the Federal Reserve eases monetary policy aimed at increasing aggregate demand to counter the negative supply shock,the inflation rate will decrease
• D)all of the above
• E)none of the above

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Definitions:

Liability Insurance

A type of insurance that protects an individual or business from the risk of being sued and held legally liable for something such as malpractice, injury, or negligence.

Step-Variable Cost

A cost that remains fixed for a certain level of production or activity, but jumps to a higher amount once a certain threshold is exceeded.

Helpline

A service providing information and support to people in need, typically available via telephone or the internet.

Volume

Refers to the quantity of an item produced or sold over a specific period of time.