Table 9-14
The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 9-15.Looking at the table above,real average hourly earnings were equal to ________ in 2012.
A)$9
B)$9.52
C)$10
D)$12

Question

Table 9-14
  The table above reports the nominal average hourly earnings in private industry and the consumer price index for 1965 and 2010.
-Refer to Table 9-15.Looking at the table above,real average hourly earnings were equal to ________ in 2012.
A)$9 
B)$9.52 
C)$10 
D)$12

Quizplus · Accepted Answer

To calculate real average hourly earnings, we need to adjust nominal hourly earnings for inflation using the consumer price index (CPI). For 2012, we can find the CPI in Table 9-15 to be 229.594. Using the formula for real earnings: (nominal earnings/CPI)*100, we get ($10.10/229.594)*100 = $4.40. Therefore, the real average hourly earnings were $9.52 in 2012. The answer is B.

Table 9-14 the Table Above Reports the Nominal Average Hourly