Suppose you are currently earning $15 an hour. If the inflation rate over the cu

Question

Suppose you are currently earning $15 an hour.  If the inflation rate over the current year is 10 percent and your firm provides a cost-of-living raise based on the rate of inflation, what would you expect to earn after your raise?  If the cost-of-living raise is always granted on the basis of the past year

Suppose you are currently earning $15 an hour. If the inflation rate over the current year is 10 percent and your firm provides a cost-of-living raise based on the rate of inflation, what would you expect to earn after your raise? If the cost-of-living raise is always granted on the basis of the past year's inflation, is your nominal income really keeping up with the cost-of-living?

Explanation / Answer

if firm provides a cost-of-living raise based on the rate of inflation then increament in earning = 10% of 15=$1.5 per hour

expected earning = $16.5 per hour

Nominal income is that part of your salary that is paid out in cash, Yes if the cost-of-living raise is always granted on the basis of the past year

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

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