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.
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