Recall Application 5, "The Declining Real Minimum Wage," to answer the following questions:
-According to the application, if the nominal minimum wage is unchanged while prices fall, then the real minimum wage:
A) falls.
B) stays the same.
C) is unaffected.
D) rises.

Question

Quizplus · Accepted Answer

If the nominal minimum wage remains unchanged and prices fall, the purchasing power of the minimum wage increases, meaning the real minimum wage rises.

Recall Application 5, "The Declining Real Minimum Wage," to Answer