If Nominal Wage Rates Increase by 5 Percent Per Year

question 42

Multiple Choice

If nominal wage rates increase by 5 percent per year and the price level increases by 3 percent per year,which of the following is correct?

• A)real wages increase by 2 percent per year
• B)real wages increase by 3 percent per year
• C)real wages decrease by 3 percent per year
• D)real wages decrease by 2 percent per year
• E)real wages remain constant

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Definitions:

Sensation

The process by which our sensory receptors and nervous system receive and represent stimulus energies from our environment.

Perception

The process by which organisms interpret and organize sensory information to understand their environment.

Receptors

Biological proteins located on cell surfaces or within cells that bind to specific molecules, triggering a response in the cell.

Sticky Mittens

An experimental tool used in developmental psychology research to explore early infant learning and motor skills development, allowing infants to grasp objects earlier than they would naturally.