If the price level rises in the short run, nominal wages will stay constant, and firms' profits will therefore rise.

So the correct answer is: stay constant; rise.

Question

If the price level rises in the short run, nominal wages will Blank______, and firms' profits will therefore Blank______.
Multiple choice question.

stay constant; rise

increase; increase

decrease; increase

rise; stay constant

GPT-4o mini · Answer

If the price level rises in the short run, nominal wages will **stay constant**, and firms' profits will therefore **rise**. So the correct answer is: **stay constant; rise**.