Todd's nominal wage increased by 5%, and the prices of goods that Todd buys increased by 3%. Todd's real wage has

Name: Todd's nominal wage increased by 5%, and the prices of goods that Todd buys increased by 3%. Todd's real wage has
Brand: Quizplus
Rating: 4.8 (29 reviews)

Question

Quizplus · Accepted Answer

Todd's real wage has increased because the increase in his nominal wage (5%) is greater than the inflation rate, or the increase in the prices of goods he buys (3%). This means that his purchasing power has increased.

Todd's Nominal Wage Increased by 5%, and the Prices of Goods