What Was the Behavior of Nominal Wages in the 1930s

question 38

Multiple Choice

What was the behavior of nominal wages in the 1930s?

• A)They remained virtually constant,justifying the assumption of nominal wage rigidity.
• B)They fell tremendously,just as Classical macroeconomics predicts.
• C)They fell a bit at first,but then rose even as output remained far below natural real GDP.
• D)They rose throughout the decade,just as Keynesian macroeconomics predicts.

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