If the aggregate price level ________,but nominal wages stay fixed,labor demand ________.
A) falls; falls
B) rises; falls
C) falls; remains unchanged
D) rises; remains unchanged

Question

Quizplus · Accepted Answer

When the aggregate price level falls but nominal wages stay fixed, the real wage (purchasing power of wages) increases, making labor more expensive for employers, leading to a decrease in labor demand.

If the Aggregate Price Level ________,But Nominal Wages Stay Fixed,labor