If There Is Inflation and We Compare the Changes in a Nominal

question 135

Multiple Choice

If there is inflation and we compare the changes in a nominal variable over time versus its real counterpart,such as the nominal wage rate versus the real wage rate,we find that the

• A)two increase at about the same rate because of inflation.
• B)real wage rate increases faster because of inflation.
• C)nominal wage rate increases faster because of inflation.
• D)two decrease at about the same rate because of inflation.
• E)two change at a rate that does not depend on the inflation rate.

---

Definitions:

Pluralistic Ignorance

A psychological phenomenon where individuals mistakenly believe their thoughts, feelings, or behaviors are different from those of the group, leading to conformity despite personal beliefs.

Diffusion of Responsibility

A sociopsychological phenomenon whereby a person is less likely to take responsibility for action or inaction when others are present.

Bystander Effect

The finding that people are less likely to offer help when they are in a group than when they are alone.

Pluralistic Ignorance

A psychological state where individuals mistakenly believe their thoughts, feelings, or behaviors are different from those of the group, often due to a lack of open communication.