If the Nominal Wage Is €10 Per Hour and the Expected

question 8

Multiple Choice

If the nominal wage is €10 per hour and the expected price level is 2 and the actual price level is 4, then expected real wage rate is:

• A)€10.
• B)€5.
• C)€2.50.
• D)none of the above.

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Definitions:

Productivity

A measure of the efficiency of production, often calculated by dividing total output by the total inputs used in the production process.

Demand

The amount of a good or service that buyers are ready and capable of buying at different price levels over a given time frame.

Human Capital

The expertise, know-how, and practical experiences that a person or collective maintains, regarded in relation to their financial or worth importance to a business or country.

Nonhuman Capital

Resources or assets that are not human, such as machinery, buildings, and land, used in the production of goods and services.