HELP ME WITH ECONOMICS?! this question is stumping me.?

  • Thread starter Thread starter LoveMyArmyMan
  • Start date Start date
L

LoveMyArmyMan

Guest
Suppose you received a 5 percent increase in your nominal wage. Over the year, inflation ran about 2 percent. Which of the following is true?

a. Your real wage fell.
b. Your nominal wage fell.
c. Both your nominal and real wages decreased.
d. Although your nominal wage fell, your real wage increased.
e. Both your nominal and real wages increased.

Please hlep me!
 
It's e.

You have to understand the definitions of nominal and real. Nominal in this case refers to how much of an increase you received in wages.

Real refers to your wage growth factoring in inflation. Since you received a 5% increase in nominal wages, and inflation was 2%, both your nominal and real wages increased.
 
Back
Top