Your boss gives you an increase in the number of dollars you earn per hour. How does this change your nominal and real wages?

Question

Quizplus · Accepted Answer

An increase in nominal wages refers to the increase in the number of dollars earned per hour, while real wages refer to the purchasing power of those dollars. If the increase in nominal wages is higher than the increase in the price level, then the real wages also increase. This is because the worker can now purchase more goods and services with their increased nominal wage.

Your Boss Gives You an Increase in the Number of Dollars