Suppose Workers Are Willing to Work More Hours When the Nominal

question 9

Multiple Choice

Suppose workers are willing to work more hours when the nominal wage increases.Which of the following characterizes the economic rationality of their decision?  

• A) The decision is NOT economically rational, because it should be based on the real wage only. 
• B) The decision could be rational if workers thought that the inflation rate would fall in the future. 
• C) The decision could be rational if workers thought that the real wage had fallen. 
• D) The decision could be rational if workers thought that the nominal wage and the real wage were equal.