If the price level increases by 5 percent and the nominal wage ...

[SGallaher96]

If the price level increases by 5 percent and the nominal wage increases by 3.5 percent, the real wage will decrease by 1.5 percent.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

If interest rates are to remain constant, the money supply should change:
 a. in the opposite direction to a change in aggregate demand.
  b. in the same direction as a change in money demand.
 c. only when investment changes.
 d. only when the demand for money decreases.
 e. only when the inflation rate changes.

[Anna]

Answer to Question 1

True

Answer to Question 2

b