The Reason That Economists Are Concerned with Looking at the Real

question 36

Multiple Choice

The reason that economists are concerned with looking at the real wage is that

• A)the real wage shows absolute buying power and allows economists to compare U.S.pay to that of other countries.
• B)because of inflation, the nominal wage often understates the actual rise in purchasing power.
• C)the real wage simplifies the gathering of statistics.
• D)standard of living and pay really are determined by purchasing power, not number of dollars.
• E)the real wage shows that pay actually has been falling for a long time.

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Definitions:

Income Statement

A financial document that summarizes a company's revenue, expenses, and profits over a specific period, usually a fiscal quarter or year.

Special Item

Unusual or infrequent gains or losses in a company’s financial statements, which are not expected to recur in the foreseeable future.

Discontinued Operations

Components of a business that have been disposed of or are classified as held for sale, and will not be continuing operations in the future.

Future Cash Flows

Estimated future financial earnings or expenses, which are used in various financial analyses to determine investment potential or project value.