Asked by Haylee Green on Jun 09, 2024
Verified
The real wage is equal to the:
A) wage measured in terms of the quantity of goods and services it buys.
B) wage measured in terms of the dollar value of the goods and services it buys.
C) nominal wage net of taxes paid on wages.
D) non-wage benefits received by workers.
E) product of the nominal wage and the price level.
Real Wage
Refers to wages that have been adjusted for inflation, representing the purchasing power of income.
Nominal Wage
The wage paid to labor in current dollar terms, without adjustment for inflation.
Goods and Services
The output of an economy that fulfills consumer needs, with goods being tangible products and services being intangible activities performed for consumers.
- Perceive the interaction between nominal wages, real wages, and price indices.
- Clarify the definitions of, and differences between, nominal and real wages.
Verified Answer
NA
Nathaniel ArndtJun 12, 2024
Final Answer :
A
Explanation :
The real wage is the wage measured in terms of the quantity of goods and services it can buy. It reflects the purchasing power of the wage, which is affected not only by the nominal wage but also by the price level of goods and services.
Learning Objectives
- Perceive the interaction between nominal wages, real wages, and price indices.
- Clarify the definitions of, and differences between, nominal and real wages.