An increase in a person's real wage necessarily means
A)greater purchasing power
B)a lower nominal wage
C)a lower nominal wage after payment of taxes
D)a higher nominal wage
E)a higher nominal wage after payment of taxes

Question

Quizplus · Accepted Answer

An increase in a person's real wage means that the person can buy more goods and services with their wages. This is because the real wage is the nominal wage adjusted for inflation. So, if the nominal wage increases by less than the inflation rate, the real wage will decrease.

An Increase in a Person's Real Wage Necessarily Means