If productivity growth is 2 percent and inflation is 5 percent, on average, nominal wage increases will be:
A)2 percent.
B)3 percent.
C)5 percent.
D)7 percent.

Name: If productivity growth is 2 percent and inflation is 5 percent, on average, nominal wage increases will be: A)2 percent. B)3 percent. C)5 percent. D)7 percent.
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Question

Quizplus · Accepted Answer

Nominal wage increases typically reflect the sum of productivity growth and inflation, so in this case, 2 percent (productivity growth) + 5 percent (inflation) = 7 percent.

If Productivity Growth Is 2 Percent and Inflation Is 5