If Workers Received a 5 Percent Wage Increase and the Rate

question 101

Multiple Choice

If workers received a 5 percent wage increase and the rate of inflation was 3 percent, then their real wage:

• A)increased.
• B)decreased.
• C)remained constant.
• D)equaled the nominal wage.

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Definitions:

Old-Age Pensions

Retirement benefits provided by the government, employers, or other institutions to support individuals financially after they retire.

Military Expenditures

The funds spent by a country on its military forces, including salaries, equipment, and operations.

Marginal Tax Rate

The marginal tax rate is the percentage of tax applied to your income for each tax bracket in which you qualify, essentially the rate paid on the last dollar of your income.

Average Tax Rate

The percentage of total income that is paid in taxes, calculated by dividing the total amount of taxes paid by the total income.