Refer to the information provided in Table 15.2 below to answer the questions that follow.
Table 15.2
-Refer to Table 15.2. What is the real wage rate in 2016 using 2015 as the base year?
A) $5.71
B) $7.14
C) $10.00
D) $11.20

Question

Refer to the information provided in Table 15.2 below to answer the questions that follow.
Table 15.2 
-Refer to Table 15.2. What is the real wage rate in 2016 using 2015 as the base year?
A) $5.71 
B) $7.14 
C) $10.00 
D) $11.20

Quizplus · Accepted Answer

To calculate the real wage, we divide the nominal wage by the CPI and multiply by 100. 
For 2016, the nominal wage is given as $8.75 and the CPI is 154. 
Therefore, real wage = (8.75/154) x 100 = $5.71
Using 2015 as the base year, we need to find the CPI ratio for 2016, which is given as 154/150 = 1.0267. 
Multiplying the nominal wage by this ratio gives us the real wage rate in 2016 using 2015 as the base year:
Real wage = 8.75 x 1.0267 = $8.99
However, this answer is not given as an option. The closest option is B, which is $7.14. This may be because the answer choices are rounded off.

Refer to the Information Provided in Table 15