The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.

-What is real wage?
A)The nominal wage multiplied by the price level.
B)The purchasing power,given a set of prices,of the nominal wage.
C)The income received for the use of capital.
D)The wage rate expressed as a dollar and cents figure.

Question

The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
 
-What is real wage?
A)The nominal wage multiplied by the price level. 
B)The purchasing power,given a set of prices,of the nominal wage. 
C)The income received for the use of capital. 
D)The wage rate expressed as a dollar and cents figure.

Quizplus · Accepted Answer

Real wage refers to the purchasing power of the nominal wage, given a set of prices. It takes into account inflation or deflation effects on wages. Option A is incorrect as it refers to the calculation of nominal GDP. Option C refers to rent received for the use of capital, not wages. Option D is incorrect as it refers to nominal wage expressed as a dollar and cents figure, which does not consider inflation or purchasing power.

The First 3 Columns of the Following Table Show Data