Looking at the following table,what is the rate of growth of real average hourly earnings from 2016 to 2017? $$\begin{array} { | c | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Nominal Average } \
\text { Hourly Earnings, } \$
\end{array} & \text { CPI } \
\hline 2016 & 10 & 100 \
\hline 2017 & 10 & 105 \
\hline 2018 & 12 & 110 \
\hline
\end{array}$$

Question

Looking at the following table,what is the rate of growth of real average hourly earnings from 2016 to 2017? $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Nominal Average } \
\text { Hourly Earnings, } \$
\end{array} & \text { CPI } \
\hline 2016 & 10 & 100 \
\hline 2017 & 10 & 105 \
\hline 2018 & 12 & 110 \
\hline
\end{array}$$

Quizplus · Accepted Answer

The real average hourly earnings are calculated by adjusting nominal earnings for inflation using the CPI. In 2016, real earnings = 10/100 = 0.1. In 2017, real earnings = 10/105 ≈ 0.0952. The growth rate is (0.0952 - 0.1) / 0.1 = -0.048, or approximately -5%.

Looking at the Following Table,what Is the Rate of Growth