All Else Being Equal, Suppose the Nominal Wage Rate and the Price

question 22

Multiple Choice

All else being equal, suppose the nominal wage rate and the price level both fall by 10 percent. As a result,

• A)the quantity of labor demanded increases.
• B)the quantity of labor demanded does not change because there is no change in the real wage.
• C)people are worse off and there is more unemployment.
• D)the quantity of labor demanded decreases.
• E)people are better off and there is less unemployment.

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