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 2015 using 2016 as the base year?
A) $11.20
B) $10.80
C) $6.65
D) $5.71

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 2015 using 2016 as the base year?
A) $11.20 
B) $10.80 
C) $6.65 
D) $5.71

Quizplus · Accepted Answer

To find the real wage rate in 2015 using 2016 as the base year, we need to divide the nominal wage rate in 2015 ($14.00) by the consumer price index (CPI) for 2015 (124) and multiply it by the CPI for 2016 (131). 
Real wage rate in 2015 = (Nominal wage rate in 2015 / CPI in 2015) x CPI in 2016 
Real wage rate in 2015 = ($14.00 / 124) x 131 = $11.20

Refer to the Information Provided in Table 15