What Does It Mean When a Worker Experiences a Decrease

question 101

Multiple Choice

What does it mean when a worker experiences a decrease in real wages?  

• A) The worker's purchasing power declines. 
• B) The worker's nominal wage declines. 
• C) The worker's after-tax nominal wage declines. 
• D) The worker's nominal wage rises.

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Definitions:

Loss

A decrease in net income that occurs when expenses exceed revenues, investments diminish in value, or assets are lost or damaged.

Investing Activities

Transactions involving the acquisition and disposal of long-term assets and investments not included in cash equivalents.

Financing Activities

Transactions involving long-term liabilities, stockholders' equity, and changes in short-term loans that affect a company's cash flow.

Note Payable

A written agreement to pay a specific sum of money, usually including interest, at a future date.