Suppose the base reference period is 1982-1984. If your nominal wage rate is $8.00 per hour when the CPI is 180, what is your real wage rate in 1982-1984 dollars?
What will be an ideal response?
The real wage rate equals 100 times the nominal wage rate divided by the CPI. Hence the real wage rate equals 100 × ($8.00)/(180 ) = $4.44.
You might also like to view...
Andrew is not working, but is available and willing to work after finishing a month-long mission trip for his church. While on his mission, Andrew did not look for work. Andrew is considered
A) unemployed. B) part of the labor force. C) a marginally attached worker. D) a discouraged worker. E) Both answers A and B are correct.
The gold standard probably made the Great Depression more severe in the United States because
A) the value of gold declined sharply during those years. B) the existence of the gold standard kept prices from falling. C) the money supply in the United States increased rapidly as gold flowed into the country. D) the Fed attempted to reduce gold outflows by raising the discount rate.