In 2012,the Nominal Wage Rate for Unionized Carpenters Was $37

question 126

Multiple Choice

In 2012,the nominal wage rate for unionized carpenters was $37.50 and the CPI was 204.Calculate the real wage rate for this group of workers.

• A)$37.50
• B)$47.09
• C)$5.44
• D)$18.38
• E)$1.84

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Definitions:

Multiplier

A factor that quantifies how an initial change in economic activity (e.g., spending or investment) leads to a more than proportional change in the national income.

Deflationary Gap

A situation where aggregate demand in an economy is lower than the aggregate supply, leading to falling prices, reduced production, and unemployment.

Equilibrium GDP

The level of Gross Domestic Product at which total demand for goods and services equals total supply, resulting in stable prices and employment.

Full Employment GDP

The maximum level of production an economy can sustain while keeping unemployment at its natural or non-accelerating inflation rate of unemployment (NAIRU).