Suppose the Price Level Increases by 5 Percent and the Nominal

question 146

Multiple Choice

Suppose the price level increases by 5 percent and the nominal wages of workers increase by 3 percent during a particular year.This implies that the real wage has:

• A)declined by 2 percent.
• B)declined by 8 percent.
• C)also increased by 2 percent.
• D)also increased by 8 percent.
• E)remained constant.

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Definitions:

White

In a non-technical context, it refers to the color of maximum lightness; in a technical or racial context, it has different specific meanings.

Hue

A color or shade, especially as perceived in the spectrum of visible light.

Wavelength

The distance between successive peaks of a wave, typically used in the context of electromagnetic waves like light and radio waves.

Chromatic

Relating to color or the use of color, often used in the context of visual arts or color theory.