A cut in the benefits available to unemployed people

An increase in the school leaving age to 17

An increased in consumer demand for meals out

Much tighter regulations for the UK financial services industry

Efficiency wages.

Successful trade union action to force up wages

Hysteresis

A minimum wage law

Demand shocks are always very small.

Real wages are highly flexible

Governments always act too late

Economies never displayed demand-deficient unemployment

It has no effect

It affects variables expressed in nominal terms, notably prices, but not variables expressed in real terms, notably output and unemployment

It affects variables expressed in real terms, notably output and unemployment, but not variables expressed in nominal terms, notably prices.

It affects variables expressed in nominal terms and variables expressed in real terms, notably prices, output and unemployment

No effect

The price level will rise, but by less than 10%

The price level will rise by 10%

The price level will rise by more than 10%