Author Question: Suppose the real wage of a worker remains unchanged between Year 1 and Year 2 but the nominal wage ... (Read 107 times)

abc · **on:** Jun 30, 2018

Suppose the real wage of a worker remains unchanged between Year 1 and Year 2 but the nominal wage decreases from 20 in Year 1 to 18 in Year 2 . This implies that the price level has:
a. increased by 20 percent.
b. increased by 25 percent.
c. remained unchanged.
d. fallen by 10 percent.
e. fallen by 20 percent.

Question 2

The demand for money will be high in an economy experiencing:
a. a depression.
b. hyperinflation.
c. deflation.
d. a recession.
e. a sluggish population growth.