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With a Constant Nominal Wage, a Higher-Than-Expected Level of Inﬂation

Question 30

Multiple Choice

With a constant nominal wage, a higher-than-expected level of inﬂation in an economy _____.

A) will lead to a fall in real wages
B) will lead to a fall in employment
C) will reduce short-run output
D) will reduce the level of potential GDP

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