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Suppose the Money Wage Rate and the Price Level Both

Question 39

Multiple Choice

Suppose the money wage rate and the price level both fall by 5 per cent. As a result,


A) the quantity of labour demanded increases.
B) the quantity of labour demanded does not change because there is no change in the real wage.
C) people are worse off and there is more unemployment.
D) the quantity of labour demanded decreases.

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