Suppose that over the course of a year, one's wage increases from $20 per hour to $22 per hour. If the inflation rate for the year is 12 percent, then the

Name: Suppose that over the course of a year, one's wage increases from $20 per hour to $22 per hour. If the inflation rate for the year is 12 percent, then the
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The nominal wage increased by 10% (from $20 to $22), but with an inflation rate of 12%, the real wage, which accounts for inflation, has effectively decreased by 2%.

Suppose That Over the Course of a Year, One's Wage