Real wage 5 Employed Wage-setting curve Workers (millions) Labour supply Labour productivity A Price-setting curve 9 10 Unemployed Suppose there is an increase in workers' bargaining power that causes inflation. Which of the following statement is NOT correct according to the above figure? ○ Workers' bargaining power can increase due to an increase in unemployment benefits, resulting in a rise in the wage-setting curve. Workers' bargaining power can increase due to a decrease in the unemployment level along a given wage-setting curve. ○ After the initial increase in the workers' bargaining power, the firms adjust the wages and prices by shifting the wage-setting curve, creating inflation. After the initial increase in the workers' bargaining power, the firms adjust the wages and prices, creating inflation. Neither the wage nor the price-setting curve shifts.