Suppose the Real Wage Remains Unchanged Between Year 1 and Year

question 45

Multiple Choice

Suppose the real wage remains unchanged between Year 1 and Year 2 but the nominal wage increases from $20 to $24.Based on this information,we can conclude that the price level has:

• A)increased by 20 percent.
• B)increased by 25 percent.
• C)remained unchanged.
• D)decreased by 10 percent.
• E)decreased by 20 percent.

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Definitions:

Macroeconomics

A branch of economics that studies how the aggregate economy behaves, focusing on indicators such as GDP, unemployment rates, and inflation.

Descriptive Economics

The branch of economics focused on describing the components of the economy and how they function, without making judgments about them.

Institutional Economics

A branch of economics focusing on the role of institutions in shaping economic behavior.

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