Question 12: ( On the NAIRU) If unemployment is an impediment to the bargaining power of labor for better wages, then adaptation of the non-accelerating inflation rate unemployment (NAIRU) theory by policy makers does put a cap or lid on wages.

a): True b): False c): they are uncorrelated d): hard to tell

Question 13 (Inflation, Wages and Monetary Policy): If unemployment leads to lower wages, and the FEDs method for keeping inflation down, is the creation of unemployment (See Phillips Curve), then can we conclude that the FEDs fight against inflation is also a fight against wage increases!

a. Yes b. No c. Hard to tell

Question 14: (Wages and Monetary Policy : In the midst of 1970s the macro management of the U.S economy was transferred by the ruling elites from the US government to the FED. Since then, labor wages, in real terms (adjusted for inflation), have decreased by 10% despite the fact that laborers are two times more productive. What is the most plausible explanation?

a): Technological factors, labor is not as useful as before

b): The macro-management of the economy by the FED

c): Government tax policies

d): Trickle-down economics

e): Decrease in the capabilities of the U.S. labor force