In the short run, when nominal wages are fixed but the price level increases due to a rise in exports, the real wages will typically __________.

In the short run, when nominal wages are fixed and the price level increases because of a rise in exports, real wages will typically decrease. Real wages refer to the purchasing power of workers’ earnings, which is affected by the prices of goods and services. If prices go up but wages stay the same, workers can buy less with the same amount of money, meaning their real wages fall. For example, if a worker earns $1,000 a month and the cost of living increases, they might find that their paycheck no longer stretches as far as it used to, making it harder to afford the same items. Thus, even though they are earning the same nominal amount, their ability to purchase goods declines, reflecting a decrease in real wages.