An increase in the expected price level will
A)increase labor supply,money wages,decrease the price level and income.
B)decrease labor supply,increase money wages,decrease the price level and income.
C)decrease labor supply,decrease money wages,and decrease the price level and income.
D)increase labor supply,decrease money wages,decrease the price level,and increase income.

Question

Quizplus · Accepted Answer

An increase in the expected price level typically leads to workers demanding higher wages to maintain their purchasing power, which can decrease labor supply as employers may hire less due to higher wage costs. This can lead to an increase in money wages. However, the decrease in labor supply can reduce production, potentially leading to a decrease in the overall price level and income due to lower economic output.

An Increase in the Expected Price Level Will