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Suppose the Price Level Rises by 5 Percent and the Nominal

Question 109

Multiple Choice

Suppose the price level rises by 5 percent and the nominal wage rises by 3 percent.How is the real wage affected?

A) It falls by 8 percent.
B) It falls by 2 percent.
C) It rises by 8 percent.
D) It rises by 2 percent.

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