Inflation is occurring in a nation; the implication(s)of this is/are
A) that both real and nominal wages are rising.
B) that both real and nominal wages are falling.
C) almost none,because most wages increase at about the same rate as inflation.
D) that holding nominal wages constant,the real wage would rise.
E) that holding nominal wages constant,the real wage would fall.

Question

Quizplus · Accepted Answer

Inflation causes a decrease in the purchasing power of money. This means that if nominal wages (the amount of money earned) stay the same, the real wage (what that money can buy) would decrease, leading to a fall in real wages.

Inflation Is Occurring in a Nation; the Implication(s)of This Is/are