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If the Real Wage Needs to Decrease to Restore Equilibrium

Question 80

Multiple Choice

If the real wage needs to decrease to restore equilibrium in a labour market,this can happen by


A) keeping the nominal wage constant and allowing deflation to allow the real wage to decline.
B) keeping the nominal wage constant and allowing inflation to allow the real wage to decline.
C) raising the nominal wage and allowing deflation to allow the real wage to decline.
D) raising the nominal wage so long as there is no inflation occurring in the economy.

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