Homework Answers
(a) Real minimum wage in 1979 measured in 2010 dollars=(CPI in 2010/CPI in 1979)*Minimum wage in 1979
Real minimum wage in 1979 measured in 2010 dollars=(218.056/72.6)*2.90=$8.71
Answer: $8.71
(b) Real minimum wage in 2010 measured in 1979 dollars=(CPI in 1979/CPI in 2010)*Minimum wage in 2010
Real minimum wage in 2010 measured in 1979 dollars=(72.6/218.056)*7.25=$2.41
Answer: $2.41
(c) Real minimum wage in 1979 measured in base-year dollars=(CPI in base year/CPI in 1979)*Minimum wage in 1979
Real minimum wage in 1979 measured in base-year dollars=(100/72.6)*2.90=$3.99449 = $3.99
Answer: $3.99
(d) Real minimum wage in 2010 measured in base-year dollars=(CPI in base year /CPI in 2010 year)*Minimum wage in 2010
Real minimum wage in 2010 measured in base-year dollars=(100/218.056)*7.25=$3.32483 = $3.32
Answer: $3.32
(e) Percent change in real minimum wage=(3.32483-3.99449)/3.99449=-16.76%
Answer: -16.76%
(f) We can see that real wage is higher in 1979. So, workers were better off in 1979.
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Question 4: real and nominal values The minimum wage was $2.90 per hour in 1979 and...
In 1979, the price of gasoline was $1.389 per gallon and the CPI was 72.6. In...
In 1979, the price of gasoline was $1.389 per gallon and the CPI was 72.6. In 2003, the price of gasoline was $1.589 per gallon and the CPI was 192.9. Find the real price of gasoline in 1979 and 2003 in terms of base period dollars. Explain how real and nominal vales differ,
Calculate the percentage change in U.S. real minimum wages between 1957 and 2016: negative 18.38%. (Enter...
Calculate the percentage change in U.S. real minimum wages
between 1957 and 2016:
negative 18.38%. (Enter your response as a percentage
rounded to two decimal places).Calculate the percentage change in
French real minimum wages between 1957 and 2016:
286.97%. (Enter your response as a percentage rounded to two
decimal places).
Use the information in the Slowing table to determine the percentage changes in te U.S and French real miimum wages betwean 1957 and 2016 United States France Year 1957 016...
problem 2 nominal vs real minimum wage PART II. PROBLEM: NOMINAL VS REAL (20 Marks) The...
problem 2 nominal vs real minimum wage
PART II. PROBLEM: NOMINAL VS REAL (20 Marks) The table below show the nominal minimum wage in BC for selected years and the corresponding consumer price index (CPI) for those years. Year Year Nominal Minimum Wage (5 per hour) Consumer Price Index (2014 = 100) Nominal Minimum Wage (5 per hour) Consumer Price Index (2014 - 100) 1976 1987 1990 1993 1995 1998 2000 3.00 4.00 5.00 6.00 6.50 26.2 57.8 65 9...
The federal minimum wage has remained frozen for the past three years at $7.25 an hour,...
The federal minimum wage has remained frozen for the past three years at $7.25 an hour, while the prices of gas and milk have risen steadily. Over this three-year period, the real value of the minimum wage has fallen to $6.77 per hour. By what percentage did the CPI increase over these three years?
5. Dave's nominal wage is $15 per hour in 2016. year. Dave's real wage in 2016...
5. Dave's nominal wage is $15 per hour in 2016. year. Dave's real wage in 2016 is a. $12.5, 2009 b. $12.5, 2016 c. $8, 2009 d. $8, 2016 e. $15, 2009 The CPI price index for 2016 is 120 with 2009 as the base per hour irn dollars. 6. Which one of following economists wrote The General Theory, a book that stressed the important role of the government in maintaining the stability of the macroeconomy a. Janet Yellen b....
3. Convert the nominal wage rates in the following table to real wage rates. The formula...
3. Convert the nominal wage rates in the following table to real wage rates. The formula is Real (Nominal/Price Index) x 100, when you are converting a nominal number into a real number, getting rid of the effects of inflation, your resulting real number should be in the same units as the original nominal number. It should also be in the same general magnitude, unless you are going back hundreds of years of looking at a country that has experienced...
3. At the time this book went to print, the minimum wage was $7.25. To find...
3. At the time this book went to print, the minimum wage was $7.25. To find the current value of CPI, go to http://www.bls.gov/epi/home.htm. Click on "CPI Tables," which is found on the left side of the website. Then, click on Table Containing History of CPI-UU Indexes and Annual Percent Changes from 1913 to Present." This will give you the CPI from 1913 to the present. a. With these values, calculate the current real minimum wage in 1990 dollars. S....
04 Question (3 points) In 1938 the Fair Labor Standards Act (FLSA) established an hourly minimum...
04 Question (3 points) In 1938 the Fair Labor Standards Act (FLSA) established an hourly minimum wage of 25 cents per hour. Since then, the minimum wage has increased 22 times, and it currently stands at $7.25 per hour. The table below shows the minimum wage and the CPI for various years since 1938. Refer to the information in the table to answer the questions below CPI Minimum wage Year $0.25 14 1938 $2.90 1979 69 $3.80 1990 127 210...
Suppose that the economy of Witland in the figure below is at full-employment equilibrium and the present nominal wage rate is $22 per hour. Round your answers to two decimal places. a. The real wage rate (in base year prices) is $ . b. Suppose th
Suppose that the economy of Witland in the figure below is at full-employment equilibrium and the present nominal wage rate is $22 per hour. Round your answers to two decimal places. a. The real wage rate (in base year prices) is $ . b. Suppose that aggregate demand increases by $400. Draw the new AD curve in the graph above. Plot only the endpoints of the curve. c. At the new equilibrium real GDP level, the value of the real wage rate will be...
10 pts Question 4 A labor contract provides a first year (nominal) wage of $20 per...
10 pts Question 4 A labor contract provides a first year (nominal) wage of $20 per hour, and specifies that the real wage will increase by 4% each year. The CPI is 20 in the first year, 2.05 in the second year, and 2.1 in the third year. What is the nominal wage that must be paid in the second year of this contract? $21.30 $2132 $22.60 $22.71
Calculate the percentage change in U.S. real minimum wages
between 1957 and 2016:
negative 18.38%. (Enter your response as a percentage
rounded to two decimal places).Calculate the percentage change in
French real minimum wages between 1957 and 2016:
286.97%. (Enter your response as a percentage rounded to two
decimal places).
Use the information in the Slowing table to determine the percentage changes in te U.S and French real miimum wages betwean 1957 and 2016 United States France Year 1957 016...
problem 2 nominal vs real minimum wage
PART II. PROBLEM: NOMINAL VS REAL (20 Marks) The table below show the nominal minimum wage in BC for selected years and the corresponding consumer price index (CPI) for those years. Year Year Nominal Minimum Wage (5 per hour) Consumer Price Index (2014 = 100) Nominal Minimum Wage (5 per hour) Consumer Price Index (2014 - 100) 1976 1987 1990 1993 1995 1998 2000 3.00 4.00 5.00 6.00 6.50 26.2 57.8 65 9...
5. Dave's nominal wage is $15 per hour in 2016. year. Dave's real wage in 2016 is a. $12.5, 2009 b. $12.5, 2016 c. $8, 2009 d. $8, 2016 e. $15, 2009 The CPI price index for 2016 is 120 with 2009 as the base per hour irn dollars. 6. Which one of following economists wrote The General Theory, a book that stressed the important role of the government in maintaining the stability of the macroeconomy a. Janet Yellen b....
3. Convert the nominal wage rates in the following table to real wage rates. The formula is Real (Nominal/Price Index) x 100, when you are converting a nominal number into a real number, getting rid of the effects of inflation, your resulting real number should be in the same units as the original nominal number. It should also be in the same general magnitude, unless you are going back hundreds of years of looking at a country that has experienced...
3. At the time this book went to print, the minimum wage was $7.25. To find the current value of CPI, go to http://www.bls.gov/epi/home.htm. Click on "CPI Tables," which is found on the left side of the website. Then, click on Table Containing History of CPI-UU Indexes and Annual Percent Changes from 1913 to Present." This will give you the CPI from 1913 to the present. a. With these values, calculate the current real minimum wage in 1990 dollars. S....
04 Question (3 points) In 1938 the Fair Labor Standards Act (FLSA) established an hourly minimum wage of 25 cents per hour. Since then, the minimum wage has increased 22 times, and it currently stands at $7.25 per hour. The table below shows the minimum wage and the CPI for various years since 1938. Refer to the information in the table to answer the questions below CPI Minimum wage Year $0.25 14 1938 $2.90 1979 69 $3.80 1990 127 210...
10 pts Question 4 A labor contract provides a first year (nominal) wage of $20 per hour, and specifies that the real wage will increase by 4% each year. The CPI is 20 in the first year, 2.05 in the second year, and 2.1 in the third year. What is the nominal wage that must be paid in the second year of this contract? $21.30 $2132 $22.60 $22.71
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