Suppose Workers and Firms Expect the Overall Price Level to Decrease

Multiple Choice

Suppose workers and firms expect the overall price level to decrease by 2%. Given this information, we would expect that:

A) the nominal wage will decrease by less than 2%.
B) the real wage will decrease by more than 2%.
C) the nominal wage will decrease by exactly 2%.
D) the real wage will decrease by 2%.
E) the nominal wage will decrease by more than 2%.