A Labor Contract Provides for a First-Year Wage of $10

question 31

Multiple Choice

A labor contract provides for a first-year wage of $10 per hour, and specifies that the real wage will rise by 3 percent in the second year of the contract. The CPI is 1.00 in the first year and 1.07 in the second year. What dollar wage must be paid in the second year?

• A)$10.30
• B)$10.70
• C)$10.90
• D)$11.02

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Definitions:

Economic Growth

Enhanced production of goods and services within an economic framework during a set period, customarily quantified by the Gross Domestic Product.

Bad Depression

An exceptionally severe and prolonged downturn in economic activity, characterized by significant declines in income and employment.

Innovators

Individuals or entities that introduce new ideas, products, or methods, leading to change or progress.

Unemployment Rate

The unemployment rate represents the proportion of the workforce that is without a job and actively looking for work.