If Workers Are Willing to Work More Hours When the Nominal

question 22

Multiple Choice

If workers are willing to work more hours when the nominal wage increases,what can be said about the economic rationality of their decision?

• A)The decision is not economically rational,since 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.
• E)The decision is rational no matter what happens to the real wage.