When workers and firms negotiate compensation packages, they have expectations about the price level (and changes in

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Question:

When workers and firms negotiate compensation packages, they have expectations about the price level (and changes in the price level) and agree on a (1) _____ wage with those exceptions in mind. If the price level turns out to be lower than expected, a worker's (2) _____ wage is (3) _____ than both the worker and employer expected when they agreed to the wage.

Options for (1):

a. real

b. nominal

Options for (2):

a. real

b. nominal

Options for (3):

a. lower

b. higher