Asked by Simran Singh on Jul 06, 2024

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If there is an increase in the nominal (money) ,the real wage

A) will also rise.
B) will also rise,unless the consumer price index rises.
C) will also rise,unless the consumer price index rises as much or more than the nominal (money) wage.
D) None of the choices are true.

Nominal

Referring to a value expressed in current prices, without adjustment for inflation, as opposed to real values which are adjusted for inflation.

Real Wage

The purchasing power of wages, adjusted for inflation, indicating the quantity of goods and services that can be bought.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, typically used to assess inflation.

  • Comprehend the connection between nominal wages, real wages, and the consumer price index.
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Thandie MataswaJul 12, 2024
Final Answer :
C
Explanation :
An increase in nominal wage will not necessarily result in an increase in real wage, which is the wage adjusted for inflation. If the consumer price index rises at the same or a higher rate than the nominal wage, the real wage will not increase or may even decrease. Therefore, option C is the correct choice.