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A wage-price spiral occurs when rising wages lead to higher production costs, prompting businesses to increase prices for goods and services. As prices rise, workers demand higher wages to maintain their purchasing power, creating a cycle of wage increases followed by price hikes. This can be fueled by factors such as strong labor demand, inflationary expectations, or supply chain disruptions. The result is a continuous loop that can contribute to sustained inflation within the economy.
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What causes a wage price spiral and what can it lead to?
A wage-price spiral occurs when rising wages lead to increased production costs, prompting businesses to raise prices to maintain profit margins. As prices increase, workers demand higher wages to keep up with the cost of living, perpetuating the cycle. This can lead to sustained inflation, where inflation expectations become entrenched, making it challenging for policymakers to stabilize the economy. Ultimately, if unchecked, it can result in reduced purchasing power and economic instability.
Low unemployment rates in the country employers offer higher wage to meet their higher payroll costs and maintain profits they charge consumers more for goods and services what are the consequences?
a wage price spiral of ever-increasing prices
What determines the demand for labors?
causes a movement along the MRP curve: -wage rate causes a shift of the MRP curve: -price of capital -changes in productivity -changes in the price of the firm's product -demand for the product
What factors determine the demand for labor?
causes a movement along the MRP curve: -wage rate causes a shift of the MRP curve: -price of capital -changes in productivity -changes in the price of the firm's product -demand for the product
Is minimum wage a price floor?
A minimum wage could be considered a price floor because it sets a wage floor on the price of labour. Since labour is an important factor of production, and price reflects the cost of production, then higher wages correspond to higher prices if there are no productivity gains.
What is the normal price for a spiral binding machine?
The cost of a spiral binding machine can range anywhere from $85.00 to $350.00. This price is dependant on the brand and size of the machine.
What is the price of wooden spiral stairs?
The price of a wooden spiral stairs varies depends on the style you want it. A plain wooden spiral stairs would be about eight hundred us dollars to about one thousand us dollars.
The minimum wage is an example of?
The minimum wage is an excellent example of a price floor
What is a Wage Neg?
wage neg is wage negotiable. it means that you can call someone who is putting something on sale and ask them about the price.
How do you distinguish between money wage and real wage?
Real Wage = Money Wage / Price Index Real wage measures purchasing power, that is what an hour's labor can buy.
What kind of staircase causes confusion and doubt?
A spiral staircase.
Minimum wage is an example of?
a price floor.
