A factory worker earned $10 an hour in 1980. The CPI was 0.82 in 1980. The same factory worker was earning $15 an hour in 1990 when the CPI was 1.31. From 1980 to 1990, the factory worker's hourly real wage:
A)increased from $7.63 to $18.29.
B)decreased from $12.20 to $11.45.
C)remained constant.
D)increased from $10 to $15.

Question

Quizplus · Accepted Answer

Real hourly wage decreased from $12.20 (i.e., $10/0.82)to $11.45 (i.e., $15/1.31).

A Factory Worker Earned $10 an Hour in 1980