If the price level rises by 4 percent and the nominal wage rises 6 percent,the real wage
A)falls by 2 percent
B)falls by 10 percent
C)rises by 2 percent
D)rises by 10 percent
E)remains constant

Question

Quizplus · Accepted Answer

The real wage is calculated by adjusting the nominal wage for changes in the price level. If the nominal wage increases by 6% and the price level increases by 4%, the real wage increases by the difference, which is 2%.

If the Price Level Rises by 4 Percent and the Nominal