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Nakisha Traversiere
on Nov 26, 2024

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If the price level rises by 4 percent in a year and nominal wages increase by 2 percent, then real wages will

A) decrease by 6 percent.
B) decrease by 4 percent.
C) decrease by 2 percent.
D) increase by 2 percent.

Price Level

The average of current prices across the entire spectrum of goods and services produced in the economy, reflecting a nation's cost of living.

Nominal Wages

The amount of money paid to employees not adjusted for inflation, reflecting the current dollar value of wages.

Real Wages

Pay from employment, recalibrated for price level changes to indicate the true value of work income.

  • Examine the consequences of price level shifts on the actual value of wages.
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Theelegantspa AndstoresDec 01, 2024
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