Answer (C) approximately increased by 10%
The worker received a 20% raise. Inflation ate up 10%, so his real wages increased by 10%.
Answer (B) an increase in inflation
A decrease in unemployment (8% to 6%) results in a movement up the SRPC indicating an increasing PL.
Answer (C) 8%
Nominal Interest Rate 8% = Real IR (3%) + Expected Inflation (5%)
Answer (D) structural employment
Technology eliminates jobs so that workers have to be retrained or reeducated = Structural unemployment.
Answer (C) discouraged workers
Only those looking for work are counted as unemployed. Discouraged workers are not looking.
Answer (D) a recent college graduate who is looking for her first job.
Answer (C) it is vertical at the Natural Rate of Unemployment (NRU)