If Nominal Wage Rates Increase by 2 Percent Per Year

question 101

Multiple Choice

If nominal wage rates increase by 2 percent per year and the price level increases by 5 percent per year,real wages will:

• A)increase by 3 percent per year.
• B)increase by 5 percent per year.
• C)increase by 2 percent per year.
• D)decrease by 5 percent per year.
• E)decrease by 3 percent per year.

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