Suppose You Recently Took a Pay Cut of 2% at Your

question 34

Multiple Choice

Suppose you recently took a pay cut of 2% at your job.You expect the price level to fall by 3% during this year.What would be the impact on your real wage?

• A) The real wage would fall by 3%
• B) The real wage would rise by 3%
• C) The real wage would fall by 1%
• D) The real wage would rise by 1%
• E) The real wage would be unchanged