Aggregate Supply Graded Assignment Read Chapter 10 Back to

Aggregate Supply Graded Assignment | Read Chapter 10 | Back to Assignment Due Friday 01.12.18 at 11:45 PM Attempts: Average: 3 2. Real wages, nominal wages, and unexpected changes in the price level Kate currently earns a nominal wage of $12.00 per hour in other words, the annount or her paycheck eec number of hours she works. Suppose the price of apple juice is $2.40 per gallon; in this case, Kate\'s_ real apple juice she can buy with her paycheck, is eek SZ00 per our insti wage, in terms of the amount of Sgallons of apple juice per hour When workers and firms negotiate compensation packages, they have expectations about the price level (and changes in the price level) and agree on a nominal wage with those expectations in mind. If the price level turns out to be higher than expecte, a roke\'s real wages higher than both the worker and employer expected when they agreed to the wage. Kate and her employer both expected inflation to be 4% between 2012 and 2013. so they agreed, in a two-year contra ha, i-Mould eam ,20 per hour in 2012 and $12.48 per hour in 2013. However, suppose inflation between 2012 and 2013 atualytumed out to 5%. nts. or example, suppose the price of apple juice rose from $2.40 per gallon to $2.52 per gallon. This means that between 2012 and 2013, Kate\'s nominal wage increased by 1%) , and her real wage by approximately Grade it Now Save & Continue Continue without saving Copyright Notices . Terms of Use Privacy Notice . Security Notice · Accessibility

Solution

Other answers given are right except the following

If price level turns to be higher than expected a workers real wage is Lower...........

Kates nominal wage increased by 4% and real wage decreased by approximately 0.95.

If there is any variation in answers please comment with exact choices. Will then review answer but I hope the choices given are same as I answered. Please like answer