P Take a Test Carla Hepburn Google Chrome https:// 136670024&centerwin; yes Carl

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P Take a Test Carla Hepburn Google Chrome https:// 136670024&centerwin; yes Carla Hepburn & 7/5/16 5:09 PM ECO 2013 Summer B2016 TR 8am Quiz QUIZ 2 GDP and Unemployment Time Remaining: 01:07:44 Submit Quiz This Question 1 pt This Quiz: 20 pts possible 9 of 20 (7 complete) Congratulations! Your boss has given you a raise you want to know whether your purchasing power has actually increas since inflation is rising as well. The table below gives you data for wages and However, Consumer Price Index (CPI) for the last two years Wage ($/day) CPI Year 1 $2,500 110 $2,625 118.8 Year 2 The nominal percentage increase in your wage is (Round your answer to one decimal place The real percentage increase in your wage is (Round your answer to one decimal place.) Enter your answer in each of the answer boxes. Screenshot Added A screenshot was ad

Explanation / Answer

Nominal % increase = Change in Wage/Wage in Year1*100 = (2625-2500)/2500*100 = 125/2500*100 = 5%

Increase in Inflation = (CPI2 - CPI1)/CPI1*100 = (118.8-110)/110*100 = 8%

Real % increase in Wage = Nominal % increase - Increase in Inflation = 5% - 8% = -3%

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