Question: Workers will more readily accept a real wage cut that arises from an increase in the consumer prices than a cut in their nominal wage

Workers will more readily accept a real wage cut that arises from an increase in the consumer prices than a cut in their nominal wage rate.
Explain why inflation influences a worker’s real wage rate. Why might this observation be true?

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The real wage rate equals the nominal wage rate divided by the price level Inflation ... View full answer

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