Table 5-7 shows a mechanic's hourly wage and the respective price indexes for the years 1975 and 2005. Use the table to answer questions .
Table 5-7

-Refer to Table 5-7. Which of the following statements is true?

Question

Table 5-7 shows a mechanic's hourly wage and the respective price indexes for the years 1975 and 2005. Use the table to answer questions .
Table 5-7
 
-Refer to Table 5-7. Which of the following statements is true?

Quizplus · Accepted Answer

Both the nominal and real wage increased over the 30-year period. The nominal wage increased from $3.00 in 1975 to $15.00 in 2005, and the price index increased from 40 to 170. However, the increase in the price index is reflected in the calculation of the real wage, which increased from $7.50 in 1975 to $15.00 in 2005. Therefore, the real wage also increased.

Table 5-7 Shows a Mechanic's Hourly Wage and the Respective