The change in the quantity of goods and services that an hour's work can buy is measured by the

Question

Quizplus · Accepted Answer

The change in the quantity of goods and services that an hour's work can buy is measured by the real wage. The real wage is calculated by adjusting the nominal wage for inflation. Therefore, it takes into account the purchasing power of a worker's earnings. The CPI (Consumer Price Index) is a measure of inflation and is not specific to measuring changes in real wages. The real interest rate is a measure of the cost of borrowing and lending and is not related to measuring changes in real wages. The inflation rate measures the rate of change in prices over time, but it does not directly measure changes in the purchasing power of an hour's work.

The Change in the Quantity of Goods and Services That