In which of the following situations would an individual experience an increase in real wages?
A) Receiving a 5 percent increase in nominal wages while inflation was 6 percent
B) Taking a 3 percent cut in nominal wages while deflation was 4 percent
C) Taking a 1 percent cut in nominal wages while inflation was 1 percent
D) Receiving a 3 percent increase in nominal wages while inflation was 3 percent
E) Receiving no increase in nominal wages while inflation was 0 percent

Question

Quizplus · Accepted Answer

When nominal wages decrease by 3 percent and deflation is 4 percent, the real purchasing power of wages increases by 1 percent.

In Which of the Following Situations Would an Individual Experience