If the Inflation Rate Is 3 Percent and the Nominal

question 79

Multiple Choice

If the inflation rate is 3 percent and the nominal wage is frozen for one year,by how much will the real wage change?

• A) It will decrease by about 3 percent.
• B) It will not change.
• C) It will increase by 3 percent.
• D) It will triple.
• E) We do not have enough information to determine this answer.

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