Part 1: Check Your Understanding- Answer the questions. 1. If your nominal wage increases by 25%, 1will you definitely have a 25% increase in purchasin power? Why or why not? Not necessarily, using the Real GDP can more accurately showcase how much purchasing p increased from the year before as nominal wage only showcases the current year and do account for inflation. 2. If your nominal wage rises from $10 to $12 wt'iile the CPI rises from 150 to 18D will your real w e increase, decrease, or stay the same? Explain. Your real wage would stay the same as the percentage increase of your nominal wage and G 3. It nominal GDP increased by 20% and inflation increased by 10%, did the real GDP increase decrease, or stay the same? Explain\"?I The real GDP would increase due to the increase of the nominal GDP being greater than the i rate. even though goods and services may have not increased. the real GDP has. It increased because the nominal GDP is still 10% greater than the inflation rate. 4. Assume that the nominal GDP is $60 billion and the real GDP is $40 billion. Calculate the GDP detlator. Show your work. EDI-4E] * 100 = 50%