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In the Cost-Push Model of Inflation, Increases in Nominal-Wage Rates

Question 31

Multiple Choice

In the cost-push model of inflation, increases in nominal-wage rates that exceed increases in the productivity of labor:


A) Increase aggregate supply and the price level in the economy
B) Increase aggregate supply and decrease the price level in the economy
C) Decrease aggregate supply and the price level in the economy
D) Decrease aggregate supply and increase the price level in the economy

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