Workers usually negotiate compensation in terms of the nominal ...

[frankwu]

Workers usually negotiate compensation in terms of the nominal wage because wage agreements are based on expected price levels.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

In an economy in which real output grows at an average rate of 3 percent per year, a 7 percent average rate of growth in the money supply would result in a(n):
 a. inflation rate of 4 percent, if velocity of money in circulation is constant.
  b. inflation rate of -4 percent, if velocity of money in circulation is constant.
  c. 7 increase in the price level each year.
 d. 7 decrease in the price level each year.
 e. increase in the velocity of money in circulation.

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Answer to Question 1

True

Answer to Question 2

a

[frankwu]

TYSM

[Viet Thy]

Excellent