Suppose Inflation Is Expected to Be 5 Percent Next Year

question 43

Multiple Choice

Suppose inflation is expected to be 5 percent next year, and you and your employer agree to a 6 percent increase in your nominal, or monetary, wage. If inflation turns out to be 5%, what is your real wage increase?

• A) 1 percent
• B) minus 1 percent
• C) 0 percent
• D) minus 5 percent
• E) 6 percent

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Definitions:

Table Tools Design

A set of specific utilities in spreadsheet and database software used for formatting and designing tables.

Range

The difference between the highest and lowest values in a set, or a set of cells selected in a spreadsheet.

DGET Function

A database function in spreadsheet programs that extracts a single value from a column of a list or database that matches specified conditions.

Numeric Values

Quantities or numbers that are used in calculations and data analysis, essentially another term for numerical data with an emphasis on their value aspect.