Suppose Workers Agreed to an Indexed Contract That Increased Their

question 130

Multiple Choice

Suppose workers agreed to an indexed contract that increased their nominal wage by 4 percent plus 25 percent of any increase in the Consumer Price Index (CPI) .If the CPI increased by 8 percent,what would be the change in the real wage?

• A) 4 percent
• B) -2 percent
• C) 0 percent
• D) -4 percent
• E) 2 percent

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