Economists maintain that the wage rate that workers should really care about is
A) both the real wage rate and the nominal wage rate
B) the nominal wage rate
C) the nominal wage rate multiplied by the real wage rate
D) neither the real wage rate nor the nominal wage rate
E) the real wage rate

Question

Quizplus · Accepted Answer

Economists maintain that the real wage rate is the wage rate that workers should really care about, as it represents the purchasing power of their salaries in terms of goods and services. The nominal wage rate, which is the actual amount of money earned, does not take into account the effects of inflation. Therefore, a high nominal wage rate could be eroded by high inflation, leaving workers worse off in real terms.

Economists Maintain That the Wage Rate That Workers Should Really