Author Question: Workers usually negotiate compensation in terms of the nominal wage because wage agreements are ... (Read 113 times)

frankwu · **on:** Jun 30, 2018

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.