Apps D Suggested San D cos Fifth Grade Social St Anmal and Plant Cel 2017-1Kande

Question

Apps D Suggested San D cos Fifth Grade Social St Anmal and Plant Cel 2017-1Kande an MINDTAP Aplia Homework: Macroeconomic Measurements, Part I: Prices and Unemployment 8 Due Today at 1159 PM EDT Back to Assignment Attempts: 2. Real wages, nominal wages, and unexpected changes in the price level Awerage: 13 Stella currently earns a wage of $12.00 per hour; in other words, the amount of her paycheck each week is $12.00 per hour times the number of hours she works. Suppose the price of sparkling water is $4.00 per gallon; in this case, Stella's of sparkling water she can buy with her paycheck, is of sparkling water per hour. -wage, in terms of the amount When workers and firms negotate compensation packages, they have expectations about the price level (and changes in the price level) and agree on Wage with those expectations in mind. If the price level turns out to be lower than expected, a workers- than both the worker and employer expected when they agreed to the wage. is Stella and her employer both expected inflation to be 3% between 2010 and 2011, so they agreed, in a two-year contract, that she would earn $12.00 per hour in 2010 and $12.36 per hour in 2011. However, suppose inflation between 2010 and 2011 actually turned out to be i%, not 3% For example, suppose the price of sparkling water rose from $4.00 per gallon to $4.04 per gallion. This means that between 2010 and 2011, Stella's nominal wage by and her real wag by approximately Save C

Explanation / Answer

Nominal wage, Real wage, 3 units.

Nominal wage, Real wage , greater

Increases Nominal wage = (.36*100)/12 =3%

Increase, Real wage = (3.05-3)*100/3= 1.66%

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.