Question

Suppose there is a 3 percent increase in the nominal wages of workers in an economy. The annual rate of inflation in the economy is about 6 percent. Which of the following is true in this case?​

Group of answer choices

Real wages would increase by about 10 percent.​

Real wages would increase by about 20 percent.​

Real wages would increase by about 50 percent.​

Real wages would fall by about 25 percent.​

​Real wages would fall by about 3 percent.

Answer 1

Real wage increase equal to Nominal Wage increase - Inflation

= 3%-6%=-3% and therefore it can be mentioned that the real wage decreased by 3% is the inflation is 3% higher than the nominal wage increase and therefore

(d)

​Real wages would fall by about 3 percent.

Is answer to this question