If public opinion surveys show that the majority of Americans regard inflation a

Question

If public opinion surveys show that the majority of Americans regard inflation as a more serious threat than unemployment: a) Does this imply that the majority of Americans would rather be unemployed in a period of stable prices than employed in a time of rising prices? b) If the management of a firm allowed employees to vote on whether the firm should lay off 10% of the employees or reduce wage rates by 5%, how do you think they would vote? Do you think the outcome of the vote would depend on whether the employees knew in advance exactly who would be laid off?

Explanation / Answer

Hi, Please find the answers as follows: Part A: It is a general perception that inflation can impact the day to day lives of human beings. As inflation increases, the demand for goods decreases resulting in a short supply of goods. This in turn reduces the demand for labor resulting in higher unemployment. Therefore, the statement mentioned in the question is not correct. Part B: Most of the employees would vote in favor of reduction of wage rates. As per my opinion, it will not make any difference if employees knew in advance exactly who would be laid off. Thanks.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.