Behavioral economists have discovered that people view a 2% decrease in their income without inflation as unfair,

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Behavioral economists have discovered that people view a 2% decrease in their income without inflation as unfair, but a 3% increase in their income in the presence of 5% inflation as fair. What are the nominal and real rates of change in their incomes? What tendency is leading people to feel like the pay decrease is unfair?

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Principles Of Economics

ISBN: 9781319330156,9781319419769

2nd Edition

Authors: Betsey Stevenson, Justin Wolfers

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