Suppose That in the Country of Gardenia the Nominal Wage

question 118

Essay

Suppose that in the country of Gardenia the nominal wage rate is $16 per hour and the price level is 1.25.
a)What is the value of the real wage?
b)If the nominal wage rate increases by 10% what will be the new value of the real wage rate?
c)If,instead,the price level were to increase by 10% what would be the new value of the real wages rate?

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