Pessimism Suppose the Economy Is in Long-Run Equilibrium. Then Because of of Corporate

Multiple Choice

Pessimism
Suppose the economy is in long-run equilibrium. Then because of corporate scandal, international tensions, and loss of confidence in policymakers, people become pessimistic regarding the future and retain that level of pessimism for some time.


-Refer to Stock Market Boom 2015.What happens to the expected price level and what impact does this have on wage bargaining?

A) The expected price level falls.Bargains are struck for higher wages.
B) The expected price level falls.Bargains are struck for lower wages.
C) The expected price level rises.Bargains are struck for higher wages.
D) The expected price level rises.Bargains are struck for lower wages.