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According to the sticky-wage theory, if the expected price level is lower than the actual price level A.real wages are higher than expected, unemployment rises
According to the sticky-wage theory, if the expected price level is lower than the actual price level
A.real wages are higher than expected, unemployment rises and output declines.
B.real wages are lower than expected, aggregate demand declines and output falls.
C.real wages are lower than expected, unemployment falls and output rises.
D.real wages are higher than expected, aggregate demand increases and thus output increases as well.
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