Suppose General Electric paid its line workers $10 per hour in 2017 when the Consumer Price Index was 100. Suppose that deflatio occurred and the aggregate price level fell to 80 in the 2018. Instructions: Round your answers to two decimal places. a. GE needed to pay its workers $ b. GE needed to pay its workers $ c. If GE kept the wage fixed at $10 per hour in 2018, in real terms, its workers got a [ in 2018 in order to keep the real wage fixed at $10. in 2018 if it wanted to increase the real wage by 10 percent. % increase in real wages.

Suppose General Electric paid its line workers $10 per hour in 2017 when the Consumer Price Index was 100. Suppose that deflatio occurred and the aggregate price level fell to 80 in the 2018. Instructions: Round your answers to two decimal places. a. GE needed to pay its workers $ b. GE needed to pay its workers $ c. If GE kept the wage fixed at $10 per hour in 2018, in real terms, its workers got a [ in 2018 in order to keep the real wage fixed at $10. in 2018 if it wanted to increase the real wage by 10 percent. % increase in real wages.

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter7: Unemployment And Inflation

Section: Chapter Questions

Problem 7E

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Tim Hortons paid its line workers $12 per hour last year when the Consumer Price Index was 100. Suppose over the past year, deflation occurred and the aggregate price level fell to 90. Instructions: Round your answers to two decimal places. a. Tim Hortons must pay its workers $ ]this year in order to keep the real wage fixed at $12. b. Tim Hortons must pay its workers $ |this year if it wants to increase the real wage by 12 percent. c. If Tim Hortons keeps the wage fixed at $12 per hour, in real terms, its workers get a % increase in wages.
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#Question 2 explain with deatils 2. A dozen (12) eggs cost $0.90 in January 1980 and $2.50 in January 2020. The average wage for production workers was $7.50 per hour in January 1980 and $21.50 in January 2020. a) Calculate the price index for a dozen eggs in both years, using 1980 as the base year. Hint: Assume the “basket” only includes a dozen eggs. b) Calculate the inflation rate for eggs between 1980 and 2020. c) Calculate the price index for the average wage for production workers in both years, using 1980 as the base year. Hint: Assume the “basket” only includes the average wage. d) Calculate the inflation rate for the average wage between 1980 and 2020. e) For each year, how many minutes did a worker have to work to earn enough money to buy a dozen eggs? f) Based on your previous calculations, did the purchasing power of workers increase or decrease in 2020 (with respect to 1980)? Explain your answer.
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