If prices increase by 8 percent and wages increase by 6 percent, the:
A) real wage has increased.
B) real wage has fallen.
C) nominal wage has fallen.
D) real wage has not changed.

Name: If prices increase by 8 percent and wages increase by 6 percent, the: A) real wage has increased. B) real wage has fallen. C) nominal wage has fallen. D) real wage has not changed.
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Question

Quizplus · Accepted Answer

When prices increase more than wages, the real wage (the purchasing power of wages) falls. So, option B is the correct answer.

If Prices Increase by 8 Percent and Wages Increase by 6