Ask Question
11 October, 12:48

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. Unemployment of university employees will fall.

B. Real wages for university employees will rise.

C. Inflation will be 5 percent the following year.

D. The decrease in inflation is expected

+2
Answers (1)
  1. 11 October, 14:24
    0
    B. Real wages for university employees will rise.

    Explanation:

    Increase in income is @ 5%, and that the actual inflation is only 4% that is less than the increase in income. Accordingly, the company is paying more to the employees, and accordingly their wages have increased.

    The amount of money available in real terms is more than the actual money, held by the employees earlier.

    This is all because the actual increase in inflation rate is less than the increase in salary of employees.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Employees at the university have negotiated a 5 percent increase in wages for the next year, based on their inflation expectations. If ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers