Nominal monthly wages increase from $1,200 to $1,300, while the price level decreases by 2 percent. The percentage change in real monthly wages is about
A)2 percent.
B)-2 percent.
C)8.3 percent.
D)10.3 percent.

Question

Quizplus · Accepted Answer

The nominal wage increase is approximately 8.33% (($1,300 - $1,200) / $1,200 * 100). With a 2% decrease in the price level, the real wage increase is approximately 10.3% (8.33% + 2%).

Nominal Monthly Wages Increase from $1,200 to $1,300, While the Price