Suppose a workers' union managed to sign a new wage contract with the employer for a 5% nominal wage increase for the coming year. The union also believes that the inflation rate next year is going to be 5%. Which of the following is CORRECT? The real wage has decreased by 5% O b. The real wage has increased by 10% None of the answers is correct O d. The real wage has increased by 5%

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Chapter6: How Statisticians Measure Inflation
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Suppose a workers' union managed to sign a new wage contract with the employer for a 5% nominal wage increase for the coming year.
The union also believes that the inflation rate next year is going to be 5%. Which of the following is CORRECT?
The real wage has decreased by 5%
O b. The real wage has increased by 10%
None of the answers is correct
O d. The real wage has increased by 5%
Transcribed Image Text:Suppose a workers' union managed to sign a new wage contract with the employer for a 5% nominal wage increase for the coming year. The union also believes that the inflation rate next year is going to be 5%. Which of the following is CORRECT? The real wage has decreased by 5% O b. The real wage has increased by 10% None of the answers is correct O d. The real wage has increased by 5%
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