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Macroeconomics

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Moderate

Real wage

MACRO-BXE21T

From year one to year two, assume that Carl's wage increases from \$10 to \$13 per hour. The price index increases from 100 to 110 between year one to year two. Which of the following is true?

A

Carl's nominal wage increased but his real wage decreased.

B

Carl's nominal wage increased by 30 percent and his real wage increased by nearly 20 percent.

C

There was a thirty percent inflation rate between the two years.

D

The real wage increased by a greater percentage amount than did the nominal wage.

E

There was deflation between years 1 and 2.