Suppose a Local Union Has a Contract That Calls for the Nominal

question 33

Multiple Choice

Suppose a local union has a contract that calls for the nominal wage to increase by 5 percent plus 100 percent of any increase in the CPI.If the CPI increases by 4% and there is a 1% positive bias in the inflation rate,by how much would nominal wages unnecessarily increase?

• A) 9 percent
• B) 1 percent
• C) 5 percent
• D) 3 percent
• E) 4 percent

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Definitions:

Ethical Regulations

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