If nominal wages cannot be cut, then the only way to reduce real wages is by:
A) adjustments via inflation.
B) unions.
C) legislation.
D) productivity increases.

Name: If nominal wages cannot be cut, then the only way to reduce real wages is by: A) adjustments via inflation. B) unions. C) legislation. D) productivity increases.
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Question

Quizplus · Accepted Answer

Adjustments via inflation can reduce real wages without cutting nominal wages, as the purchasing power of the same amount of money decreases when prices rise.

If Nominal Wages Cannot Be Cut, Then the Only Way