Samantha asks her employer for a 5% raise for the coming year. If the inflation rate during the next year is 5.5%, then her real wage will:

Question

Quizplus · Accepted Answer

If Samantha were to receive a 5% raise, but the inflation rate is 5.5%, then her purchasing power would actually decrease by 0.5%. This means that her real wage (what she can actually buy with her wage) would decrease by 0.5%.

Samantha Asks Her Employer for a 5% Raise for the Coming