Suppose workers and firms expect the overall price level to decrease by 2%. Given this information, we would expect that:
A) the nominal wage will decrease by less than 2%.
B) the real wage will decrease by more than 2%.
C) the nominal wage will decrease by exactly 2%.
D) the real wage will decrease by 2%.
E) the nominal wage will decrease by more than 2%.
Correct Answer:
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