The next question is based on the following table:
Wage Increases in First, Second, and Third Years of Union Contracts, United States, 1997-2003

-What can be said on the basis of the union contract settlement data shown?
A) Unions are becoming much more powerful in their ability to negotiate wage increases.
B) Price levels in the country are rising rapidly.
C) The most recently negotiated wage increase for a given year is below the average increase prevailing under continuing contracts for that year.
D) Wage rates adjust immediately throughout the economy in response to changing labor market conditions.
E) Labor markets are tight, so firms are increasing employment.

Question

The next question is based on the following table:
Wage Increases in First, Second, and Third Years of Union Contracts, United States, 1997-2003
 
-What can be said on the basis of the union contract settlement data shown?
A) Unions are becoming much more powerful in their ability to negotiate wage increases. 
B) Price levels in the country are rising rapidly. 
C) The most recently negotiated wage increase for a given year is below the average increase prevailing under continuing contracts for that year. 
D) Wage rates adjust immediately throughout the economy in response to changing labor market conditions. 
E) Labor markets are tight, so firms are increasing employment.

Quizplus · Accepted Answer

The data shows that the most recently negotiated wage increase for a given year is below the average increase prevailing under continuing contracts for that year. This suggests that wage increases may be slowing down or leveling off rather than increasing at a rapid rate. Option A is not supported by the data as it does not provide information on the power of unions. Option B is not supported by the data as it only shows information on wage increases and not price levels. Option D is not supported by the data as it does not provide information on the timing of wage adjustments. Option E is not supported by the data as it does not provide any information on employment levels.

The Next Question Is Based on the Following Table