Question

Since nominal wages were constant as the price level changed, you explain that a decrease in the price level leads to an __________, which leads to firms ________

Answer 1

Answer:

increase in real wages, hiring less workers

Explanation:

In the case when the nominal wages are remain same but at the same time the level of the price should changed so if there is an decrease in the level of the price so that means there is an increased in the real wages as it is an inverse relationship between the real wages and the price level due to this the firm could hired less workers as the wages are increased