If the Price Level Rises by 3 Percent and Workersʹ

Multiple Choice

If the price level rises by 3 percent and workersʹ money wages increase by 3 percent, then the

A) quantity of labor demanded does not change because there is no change in the real wage rate.
B) quantity of labor demand will decrease.
C) quantity of labor demand will increase.
D) Any of the above could occur depending on the magnitude on the dollar increase in the price level versus the dollar increase in the wage rate.