Remainder part of the Question:
Year Nominal avg. CPI
2008 16.00 202
2009 17.00 207
2010 18.00 209
Answer:
Option D Both real and nominal average hourly earnings increased.
Step-by-step explanation:
The real average hourly rate for year 2008 = 16 * 100 / 202 = 7.92%
The real average hourly rate for year 2009 = 17 * 100 / 207 = 8.21%
The real average hourly rate for year 2010 = 18 * 100 / 209 = 8.61%
We can see from the above scenario that the real avearage hourly rate has increased from the year 2008 to year 2010. We can also see that the inflation has also increased as the CPI is growing from the year 2008 to 2010.