If Bart's money wages doubled from 2013 to 2018 and the consumer price index rose by 50%, we would know that Bart's real wages

Question

Quizplus · Accepted Answer

Inflation (as measured by the consumer price index) rose by 50% from 2013 to 2018, which means that prices for goods and services increased by that amount. If Bart's money wages doubled in that same time period, then his nominal wages (the amount of money he earns) increased by 100%. However, to calculate his real wages (the purchasing power of his income), we need to adjust for inflation. To do this, we divide his nominal wage increase by the inflation rate. So, Bart's real wage increase would be 100%/50% = 2/1 = 2. This means that his real wages increased by 100%, which is less than the increase in his nominal wages. Hence option C is correct.

If Bart's Money Wages Doubled from 2013 to 2018 and the Consumer