Suppose the Real Wage of a Worker Remains Unchanged Between

Multiple Choice

Suppose the real wage of a worker remains unchanged between Year 1 and Year 2 but the nominal wage decreases from $20 in Year 1 to $18 in Year 2.This implies that the price level has:

A) increased by 20 percent.
B) increased by 25 percent.
C) remained unchanged.
D) fallen by 10 percent.
E) fallen by 20 percent.