The CPI Equals 1

question 45

Multiple Choice

The CPI equals 1.00 in year one and 1.05 in year two. If the nominal wage is $15 in year one and a contract calls for the wage to be indexed to the CPI, what will be the nominal wage in year two?

• A)$14.29
• B)$15.00
• C)$15.75
• D)$16.05

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Definitions:

Social Conformity

Adjusting one's behaviors or opinions to align with those of a group or societal expectations.

Social Facilitation

The enhancement of a person's performance on simple or well-learned tasks in the presence of others.

Revenge

The act of inflicting harm or punishment on someone in retaliation for harm they have caused; motivated by a desire for justice or vengeance.

Normative Social Influence

A type of social influence that leads to conformity, where an individual changes their behavior in order to be accepted or liked by a group.