The Real Wage in Fantasyland Has Been Constant Since 1950

question 65

Multiple Choice

The real wage in Fantasyland has been constant since 1950.The nominal wage in 2015 was $100,and the Consumer Price Index (CPI) was 200 in 2015.What was the nominal wage in 2002 if the CPI was 50 in 2002?

• A) Nominal wage = $25
• B) Nominal wage = $400
• C) Nominal wage = $100
• D) Nominal wage = $250

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Definitions:

Closing Process

The accounting procedure used to close out temporary accounts and transfer their balances to permanent accounts at the end of an accounting period.

Net Income

The amount of money remaining after all operating expenses, taxes, interest, and dividends are deducted from total revenue; a key indicator of company profitability.

Retained Earnings

The portion of a company's profits that is held or retained and not paid out as dividends to shareholders, often used for reinvestment in the business.

Dividends

Profits distributed by a corporation to its shareholders from its earnings.