Suppose the Economy Includes Two Distinct Groups of People: Wage

Multiple Choice

Suppose the economy includes two distinct groups of people: wage earners and goods sellers.If the price level falls by 10 percent and nominal wages remain unchanged,

A) there will be no redistribution of purchasing power because all wage earners in the U.S.economy receive indexed wages
B) income will be redistributed from wage earners to goods sellers
C) income will be redistributed from goods sellers to wage earners
D) real wages will fall by 10 percent
E) real wages will remain unchanged