Because the minimum wage is not indexed to inflation, when there is inflation the nominal minimum wage ________, and the real minimum wage ________.
A)remains constant; decreases
B)remains constant; remains constant
C)decreases; remains constant
D)increases; decreases

Question

Quizplus · Accepted Answer

Income that is not indexed to inflation loses purchasing power over time when inflation occurs. In the case of the minimum wage, it is constant in nominal terms but decreases in real terms.

Because the Minimum Wage Is Not Indexed to Inflation, When