If your real wage rose but your nominal wage fell,this would imply that:
A) inflation is positive but less than the rate of increase in your wage.
B) deflation has occurred.
C) your boss took some of your wages illegally.
D) the overall price level has fallen more than your nominal wage.
E) housing prices have fallen and because you own a house, it reduces the value of your real wage.

Question

Quizplus · Accepted Answer

A rise in real wages means that the purchasing power of wages has increased. If the nominal wage has fallen, then it means that the overall price level has fallen more than the nominal wage. Therefore, D is the correct answer.

If Your Real Wage Rose but Your Nominal Wage Fell,this