Assume that Ernesto earned a nominal wage rate of $15 per hour in 2001,the base year for the CPI.If the CPI in 2002 was 102.6 and his nominal wage rate was $16 per hour,what was his real wage rate in 2001?
A) $14.62
B) $15.00
C) $15.59
D) $16.00
E) His real wage for 2001 cannot be determined with the information given.

Question

Quizplus · Accepted Answer

The real wage rate in the base year (2001) is the same as the nominal wage rate, which is $15 per hour, because the CPI for the base year is 100.

Assume That Ernesto Earned a Nominal Wage Rate of $15