The real wage refers to the purchasing power of the money wage, which is the amount of goods and services that can be bought with the money wage. It takes into account changes in the price level and reflects the actual standard of living of workers.

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The Real Wage

Question 9

Multiple Choice

The real wage

A) equals the amount of goods and services that can be bought with the money wage.
B) is the amount of money received per unit of time.
C) unlike the money wage, is unaffected by changes in the price level.
D) rises faster than the money wage as the price level rises.
E) is the money wage adjusted for changes in real output.

Correct Answer: