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Suppose wages and inflation have been rising at the rate of 3% per annum over a period of time. As a result, workers negotiate a

Suppose wages and inflation have been rising at the rate of 3% per annum over a period of time. As a result, workers negotiate a 3% per annum increase in wages. If expected inflation falls to 2% but the rate of wage increase remains at 3%, then

a.both firms and workers are worse off

b.workers are better off

c.firms are better off

d.workers are worse off

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