According to Figure 7.3,prices and wages were rising,so
A)Sellers of output were better off than wage earners.
B)Everyone must have been worse off since the price level rose faster than incomes.
C)There were no redistributive effects of inflation.
D)The economy was experiencing stagflation.

Question

According to Figure 7.3,prices and wages were rising,so
A)Sellers of output were better off than wage earners. 
B)Everyone must have been worse off since the price level rose faster than incomes. 
C)There were no redistributive effects of inflation. 
D)The economy was experiencing stagflation.

Quizplus · Accepted Answer

If prices and wages are both rising, sellers of output would benefit from the increasing prices, while wage earners would only experience a higher cost of living. Therefore, sellers of output would be better off than wage earners. The other choices are not supported by the information given in the question stem.

According to Figure 7.3,prices and Wages Were Rising,so