Explain how the nominal wage rate is converted into the real wage rate. Explain why this process of conversion changes the nominal wage rate into the real wage rate
What will be an ideal response?
The real wage rate equals the nominal wage rate divided by the CPI. The nominal wage rate equals the dollars that are paid for an hour's labor. The CPI is a measure of the prices of the goods and services that the typical consumer purchases. Hence dividing the number of dollars for an hour's labor by the prices for the goods and services purchased gives, as its result, the number of goods and services that can be purchased by the hour's labor.
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A Japanese television sells for ¥100,000 and a dollar is equal to ¥100. What is the dollar price of the television?
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a. 0.5 b. 0.25 c. 1 d. 3 e. 2
For a firm, strategic interactions with other firms in the market become more important as the number of firms in the market becomes larger
a. True b. False Indicate whether the statement is true or false