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

[lindiwe]

If workers push for wages that are beyond what productivity gains can justify ________.
 
  A) a temporary negative supply shock ensues driving up prices
  B) a negative output gap ensues which will lead to higher unemployment if the Federal Reserve does not act
  C) and the Federal Reserve eases monetary policy aimed at increasing aggregate demand to counter the negative supply shock, a price-wage spiral could ensue
  D) all of the above
  E) none of the above

Question 2

Given the values in the table above, if the real interest rate rises from 5 to 6, the change in household saving is ________.
 
  A) negative 0.5
  B) negative 1.55
  C) negative 0.45
  D) 1.55
  E) none of the above

[pikon]

Answer to Question 1

D

Answer to Question 2

C

[lindiwe]

Thanks for the timely response, appreciate it

[Animal_Goddess]

Excellent