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Suppose the Price Level Increases by 5 Percent and the Nominal

Question 7

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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