Question

After increasing from $5.15 in 2007 to $7.25 in 2009, the inflation-adjusted minimum wage is:

Answer 1

The inflation-adjusted minimum wage is at its long term historical average level.

Step-by-step explanation:

Inflation is a term use to show increase in price of goods and services in the market due to increase in money supply. Different monetary policies been introduced to check inflation rate as it impact the growth rate of economy.

Inflation are adjusted to remove the affect of price inflation from the data. The formula for inflation adjustments:

`Inflation\ adjustment\ value= (Actual\ value)/(index\ value)`

Data are used only, which are currency dominated like wage rate, deposite rate, etc.

Minimum wage affect the cost of production and so the employment rate of the country.