Arnold's Nominal Wage Increased by 3%, and the Prices of Goods

question 291

Multiple Choice

Arnold's nominal wage increased by 3%, and the prices of goods that Arnold buys increased by 5%. Arnold's real wage has

• A) increased.
• B) remained constant.
• C) decreased.
• D) changed by 8%, but the direction of the change is ambiguous.

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Definitions:

Temporary Employees

Workers who are hired on a non-permanent basis, typically to fill short-term needs of the employing organization.

Technological Innovation

The process of developing and introducing new technologies or improving existing ones to solve problems or enhance capabilities.

Turnover Reductions

Efforts or strategies aimed at decreasing the rate at which employees leave an organization and need to be replaced.

Labor Surplus

A labor surplus occurs when there are more workers available than jobs, leading to unemployment and underemployment.