Employees at the university have negotiated a 5 percent increase ...

[RODY.ELKHALIL]

Employees at the university have negotiated a 5 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 4 percent over the next year, which of the following will occur?
 
  A) Real wages for university employees will rise.
  B) Unemployment of university employees will fall.
  C) The decrease in inflation is expected.
  D) Inflation will be 5 percent the following year.

Question 2

Employees at the university have negotiated a 5 percent increase in wages for the next year, based on their inflation expectations. If inflation is actually 6 percent over the next year, which of the following will occur?
 
  A) Real wages for university employees will fall.
  B) The increase in inflation is expected.
  C) Inflation will be 5 percent the following year.
  D) Unemployment of university employees will rise.

Question 3

Matt's real wage in 2014 is 26.80. If the price level is 104, what is Matt's nominal wage?
 
  A) 30.80 B) 27.87 C) 26.80 D) 25.77

[jackie]

Answer to Question 1

Beautifully done Thanks

Answer to Question 2

OMG..This is soo helpful. Thank you.

Answer to Question 3

B

[RODY.ELKHALIL]

Thank you

[jackie]

Happy to help you