Table 20-19
$$\begin{array} { | c | c | c | }
\hline \text { Year } & \begin{array} { c }
\text { Nominal Average Hourly } \
\text { Earnings }
\end{array} & \begin{array} { c }
\text { CPI } \
( \mathbf { 1 9 8 2 - 1 9 8 4 } = \mathbf { 1 0 0 } )
\end{array} \
\hline 2014 & \$ 10 & 100 \
\hline 2015 & 10 & 105 \
\hline 2016 & 12 & 110 \
\hline
\end{array}$$
-Refer to Table 20-19.Looking at the table above,what is the approximate rate of growth of real average hourly earnings from 2014 to 2015?
A)15%
B)4.4%
C)-1.5%
D)-4.8%

Question

Table 20-19
 $$\begin{array} { | c | c | c | } 
\hline \text { Year } & \begin{array} { c } 
\text { Nominal Average Hourly } \
\text { Earnings }
\end{array} & \begin{array} { c } 
\text { CPI } \
( \mathbf { 1 9 8 2 - 1 9 8 4 } = \mathbf { 1 0 0 } )
\end{array} \
\hline 2014 & \$ 10 & 100 \
\hline 2015 & 10 & 105 \
\hline 2016 & 12 & 110 \
\hline
\end{array}$$
-Refer to Table 20-19.Looking at the table above,what is the approximate rate of growth of real average hourly earnings from 2014 to 2015?
A)15%
B)4.4%
C)-1.5%
D)-4.8%

Quizplus · Accepted Answer

The real average hourly earnings are calculated by adjusting nominal earnings for inflation using the CPI. From 2014 to 2015, nominal earnings stayed the same, but the CPI increased, indicating a decrease in real earnings. The approximate rate of growth is calculated as $(10/105) / (10/100) - 1 \approx -4.8\%$.

Table 20-19 -Refer to Table 20-19