-In the above figure, which movement illustrates the impact of a falling price level and a constant money wage rate?
A) E to I
B) E to H
C) E to J
D) E to F

Question

-In the above figure, which movement illustrates the impact of a falling price level and a constant money wage rate?
A) E to I 
B) E to H 
C) E to J 
D) E to F

Quizplus · Accepted Answer

A falling price level means that the value of money is increasing. This will lead to an increase in the real wage rate, which is the amount of goods and services that can be purchased with a given amount of money. This will lead to an increase in the quantity of labor demanded, which is shown by the movement from E to I.

-In the Above Figure, Which Movement Illustrates the Impact of a Falling