For real wages to increase, which of the following must be true?
A)An employee's wage increase must be greater than the increase in the consumer price index (CPI).
B)An employee must receive a lump-sum wage increase equal to the increase in the consumer price index (CPI).
C)An employee's wage must simply increase without the influence of consumer price index (CPI).
D)The consumer price index (CPI) must increase at least as much as the employee's wage.

Question

Quizplus · Accepted Answer

Real wages refer to the purchasing power of an employee's income. For this to increase, their wage increase must be greater than the increase in the consumer price index (CPI), which measures the price changes of goods and services over time. If the wage increase is less than the increase in the CPI, the purchasing power of the employee's income decreases, resulting in a decrease in real wages. Therefore, option A is the correct choice.

For Real Wages to Increase, Which of the Following Must