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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