Real wages more accurately reflect the payment to labor

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1. Real wages more accurately reflect the payment to labor because they are adjusted for the effects of inflation.

2. Inflation tends to redistribute real income from lenders to borrowers.

3. The most important determinant of the decisions to lend or borrow is the real rate of interest.

4. Unemployment insurance cannot eliminate the national costs of lost output due to unemployed labor.

Reference no: EM13689464

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