4) Nominal & Real Wages70 pts Table 4 gives average hourly nominal wages in manufacturing and the...
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4)Nominal & Real Wages70 pts
Table 4 gives average hourly nominal wages in manufacturing and the price levels in the Narnia from 1925 to 1930. Answer each question only in a manner appropriate for the issue at hand.
Be sure to demonstrate with all data for comparative purposes. (Show all work in context.)
Table 4Year
Nominal
Wages ($/hour)
Price Level
(CPI)
1925
12.07
148.2
1926
12.37
152.4
1927
12.77
156.9
1928
13.17
160.5
1929
13.49
163.0
1930
13.91
166.6
a) For each year, calculate the real wage.
b) In what year did the nominal wage increase the most?
c) In what year did the real wage increase the most?
d) Did you get the same years for both (b) and (c)? If you did not, what accounts for the difference?(Hint:Critical Thinking)
e) True, false, uncertain, or not enough information?
"It is possible to have a situation where the nominal wage is rising and the price level is falling, while the real wage still decreases?" Provide an example and an explanation.(Hint:Critical Thinking)
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