Assume an agreement between workers and employers calls for an 8 percent increase in the wage rate, based on an expected 5 percent inflation rate. if inflation actually turns out to be 12 percent, then group of answer choices
a. nominal wages decrease by 8 percent and real wages fall by 12 percent.
b. nominal wages fall by 25 percent and real wages increase by 4 percent.
c. nominal wages increase by 8 percent and real wages fall by 4 percent.
d. nominal wages are unchanged and real wages fall by 3 percent.