Bob Smith's money wages rose from $32,000 to $48,000,while the CPI rose by 50%.His real wages

Name: Bob Smith's money wages rose from $32,000 to $48,000,while the CPI rose by 50%.His real wages
Brand: Quizplus
Rating: 4.7 (44 reviews)

Question

Quizplus · Accepted Answer

Bob Smith's nominal wage increased from $32,000 to $48,000, which is a 50% increase. The CPI also rose by 50%, indicating that the general price level increased by the same percentage. Since the increase in wages matches the increase in the price level, Bob's purchasing power or real wages remained the same.

Bob Smith's Money Wages Rose from $32,000 to $48,000,while the CPI