Table 13-16
$\begin{array}{|c|c|c|}
\hline \text { Year } & \begin{array}{c}
\text { Nominal Average } \
\text { Hourly Earnings }
\end{array} & \text { CPI } \
\hline 2016 & \$ 10 & 100 \
\hline 2017 & 10 & 105 \
\hline 2018 & 12 & 110 \
\hline
\end{array}$
-Refer to Table 13-16.Looking at the table above,real wages ________ from 2016 to 2017,and real wages ________ from 2017 to 2018.
A) rose; rose
B) rose; fell
C) fell; rose
D) fell; fell

Question

Table 13-16
 $\begin{array}{|c|c|c|}
\hline \text { Year } & \begin{array}{c}
\text { Nominal Average } \
\text { Hourly Earnings }
\end{array} & \text { CPI } \
\hline 2016 & \$ 10 & 100 \
\hline 2017 & 10 & 105 \
\hline 2018 & 12 & 110 \
\hline
\end{array}$
-Refer to Table 13-16.Looking at the table above,real wages ________ from 2016 to 2017,and real wages ________ from 2017 to 2018.
A) rose; rose
B) rose; fell
C) fell; rose
D) fell; fell

Quizplus · Accepted Answer

Real wages are calculated by dividing nominal hourly earnings by the CPI and multiplying by 100. Using this formula, the real hourly earnings in 2016 were $10 (10/100*100) and increased to $9.52 (10/105*100) in 2017, indicating a decrease. In 2018, however, the real hourly earnings increased to $10.91 (12/110*100), indicating an increase. Therefore, real wages fell from 2016 to 2017 and rose from 2017 to 2018. Choice C is the only option that reflects this trend.

Table 13-16 -Refer to Table 13-16