Question: 12. Consider the Classical AS-AD model discussed in class where workers do not suffer from money illusion. If workers decide to supply less labour at

12. Consider the Classical AS-AD model discussed in class where workers do not suffer from "money illusion". If workers decide to supply less labour at any real wage, which of the following statements is correct?

A) The real wage increases while the price level stays constant.

B) The real wage increases and the price level decreases.

C) The real wage decreases and the price level increases.

D) Both the real wage and the price level decrease.

E) Both the real wage and the price level increase.

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