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A little inflation is described as nibbling away at which measure, helping it decline if necessary?
ABank reserves
BLand values
CReal wages
DTotal exports
Answer & Solution
Correct answer: C. Real wages
1. Inflation can move a variable that is hard to move directly.
2. Nominal wages are difficult to cut outright.
3. A little inflation could nibble away at real wages.
4. It thus helps real wages to decline if necessary.
_Source: OpenStax Principles of Macroeconomics for AP Courses 2e (CC BY 4.0), Ch 8 'Inflation'_
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