Gce Model Questions Vol1 2024 Economics Question 39

Practice objective / multiple choice question 39 from the 2024 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2024 Economics Objective / Multiple Choice Medium Difficulty
Question 39 GCE_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

Over the past year nominal wages increased by 8 % while the Consumer Price Index rose by 6 %. (a) Compute the percentage change in real wages. (b) If the government expects inflation of 5 % next year and wants real wages to remain unchanged, what nominal wage increase is required?

Answer Options

Correct Answer A. Real wages rose by about 1.9 %; a 5 % nominal increase next year will keep real wages unchanged.
B. Real wages rose by about 1.9 %; a 4 % nominal increase next year will keep real wages unchanged.
C. Real wages rose by about 2.0 %; a 6 % nominal increase next year will keep real wages unchanged.
D. Real wages rose by about 1.5 %; a 5 % nominal increase next year will keep real wages unchanged.
Correct Answer
A
Correct Option:
Real wages rose by about 1.9 %; a 5 % nominal increase next year will keep real wages unchanged.

About This Question

This is Gce Model Questions Vol1 2024 Economics Question 39. It is one of the objective questions from the 2024 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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