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When All Prices Rise in Equal Proportion,including the Prices of Goods

Question 8

Multiple Choice

When all prices rise in equal proportion,including the prices of goods and inputs,

A) one moves along the same vertical LRAS curve,from a lower to a higher point,and the real wage rate and the labour market remain unaffected.
B) the real wage rate and the labour market remain unaffected,and the real price of capital and the capital market remain unaffected.
C) one moves along the same vertical LRAS curve,from a lower to a higher point,the real wage rate and the labour market remain unaffected,and the real price of capital and the capital market remain unaffected.
D) the real wage rate and the labour market remain unaffected,the real price of capital and the capital market remain unaffected,and the real prices of other inputs and their markets remain unaffected.
E) one moves along the same vertical LRAS curve,from a lower to a higher point,the real wage rate and the labour market remain unaffected,the real price of capital and the capital market remain unaffected,and the real prices of other inputs and their markets remain unaffected.

Correct Answer: