Asked by
Hasnat Mahajabin
on Nov 26, 2024Verified
If the nominal wages of carpenters rose by 5 percent in 2019 and the price level increased by 3 percent, then the real wages of carpenters
A) decreased by 2 percent.
B) increased by 2 percent.
C) increased by 3 percent.
D) increased by 8 percent.
Nominal Wages
Are the wages paid to workers measured in current monetary terms, without adjustment for inflation.
Price Level
The average of current prices across the entire spectrum of goods and services produced in the economy, often used to measure inflation.
Real Wages
Refers to wages that have been adjusted for inflation, indicating the actual buying power of the compensation.
- Assess the repercussions of fluctuations in the price level on real income.
Verified Answer
DS
Learning Objectives
- Assess the repercussions of fluctuations in the price level on real income.