Suppose There Is a 3 Percent Increase in the Nominal

question 107

Multiple Choice

Suppose there is a 3 percent increase in the nominal wages of workers in an economy. The annual rate of inflation in the economy is about 6 percent. Which of the following is true?

• A) Real wages would fall by about 3 percent.
• B) Real wages would increase by about 20 percent.
• C) Real wages would fall by about 25 percent.
• D) Real wages would increase by about 50 percent.
• E) Real wages would increase by about 10 percent.

---

Definitions:

Neutral

In automotive and machinery, it refers to a position in which no gears are engaged, allowing the engine to run without driving the wheels.

Chassis Electricity

The electrical subsystem within a vehicle's chassis, including wiring, fuses, and control modules that manage electrical components.

Eaton AMT

An Automated Manual Transmission produced by Eaton, which combines manual gearbox efficiency with automatic transmission convenience.

Mechanical Operation

The functioning or working principle of a system or component based on mechanical parts and movements.