If the Consumer Price Index (CPI)decreases from 100 to 50

question 3

Multiple Choice

If the Consumer Price Index (CPI) decreases from 100 to 50 and the nominal wage decreases from $200 to $50,what is the change in the real wage in terms of the beginning year's dollars?

• A) +$200
• B) -$100
• C) +$50
• D) -$200
• E) +$250

---

Definitions:

Living Standard

The quality and quantity of goods and services available to individuals or societies, including health, comfort, and leisure time activities.

Self-Supporting

Having the ability to provide for oneself without relying on external assistance.

Foreign Aid

Financial or in-kind assistance given by one country to another, often for humanitarian, development, or diplomatic reasons.

Interest Rates

Interest rates are the cost of borrowing money, typically expressed as a percentage of the amount borrowed, which lenders charge borrowers.