What would happen to prices if, for example, all trade unions negotiated long-term higher nominal pay and regular across-the-board increases for workers?
A) Prices would remain unchanged.
B) Prices would likely increase.
C) Prices are not affected by nominal salary increases.
D) Prices would likely decrease.

Question

Quizplus · Accepted Answer

If all trade unions negotiate for long-term higher nominal pay and regular across-the-board increases for workers, this will increase the labor costs for businesses. In order to maintain their profit margins, businesses would likely increase the prices of their goods or services. Therefore, prices would likely increase.

What Would Happen to Prices If, for Example, All Trade