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This article was selected by a teacher with suggested questions and is part of the Financial Times Free School Access Program. Details / registration here.
Click to read the article below and then answer the questions:
Distinguish between real and nominal wages.
“Increasing numbers of German workers are demanding higher wages amid rising inflation.” Explain the impact of rising inflation on real wages.
“Widespread demands for higher wages could start a self-fulfilling inflation spiral.” Explain what is meant by a wage price spiral.
“The rise in inflation is the rising energy costs and bottlenecks in the chain.” Evaluate the extent to which governments and central banks can act effectively to improve this rising inflationary pressure.
Gavin Clarke, Emmanuel College