If wages grew 4.80 percent, but inflation was 3.60 percent, what was the approximate real increase in wages? (Enter your answer as a percent rounded to 2 decimal places.)

Question

Ricardo Orozco

Business

15 November, 19:01

If wages grew 4.80 percent, but inflation was 3.60 percent, what was the approximate real increase in wages? (Enter your answer as a percent rounded to 2 decimal places.)

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Answers (1)

Know the Answer?

Malachi Larson · Answer 1

1.2%

Explanation:

The increase in wages must be bench-marked with the rate of inflation because the increase in wages does not determine your purchasing power, If the rate of inflation exceeds the percentage increase wages, your purchasing power is is declining all things being equal ...

The real increase in wages = Percentage increase in wages - Inflation rate

= 4.80 percent - 3.60 percent

= 4.80% - 3.60%

= 1.2%

Therefore the approximate real increase in wages is 1.2%