Table 13-8
The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 13-8.The percentage change in real average earnings from 1965 to 2010 equals
A)2.0 percent
B)19.7 percent.
C)24.5 percent.
D)80.3 percent.

Question

Table 13-8
  The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 13-8.The percentage change in real average earnings from 1965 to 2010 equals
A)2.0 percent 
B)19.7 percent. 
C)24.5 percent. 
D)80.3 percent.

Quizplus · Accepted Answer

To calculate the percentage change in real average earnings, we need to adjust the nominal average hourly earnings for inflation using the CPI. The formula is: 
Real average earnings = (Nominal average earnings/CPI) x 100 
For 1965: 
Real average earnings = (1.60/31.5) x 100 = 5.08 
For 2010: 
Real average earnings = (19.00/218.1) x 100 = 8.72 
The percentage change in real average earnings = ((8.72-5.08)/5.08) x 100 = 71.85% 
Therefore, the answer is C) 24.5 percent.

Table 13-8 the Table Above Reports the Nominal Average Hourly