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)

4) Nominal & Real Wages-70 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 4 Nominal Price Level Year Wages ($/hour) (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)