Suppose Workers and Firms Expect the Overall Price Level to Increase

question 19

Multiple Choice

Suppose workers and firms expect the overall price level to increase by 5%.Given this information,we would expect that

• A)the nominal wage will increase by less than 5%.
• B)the nominal wage will increase by exactly 5%.
• C)the nominal wage will increase by more than 5%.
• D)the real wage will increase by 5%.
• E) the real wage will increase by less than 5%.

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