Question

The real wage is equal to the: a. ​non-wage benefits received by workers. b. ​wage measured in terms of the dollar value of the goods and services it buys. c. ​product of the nominal wage and the price level. d. ​nominal wage net of taxes paid on wages.

Answer 1

Option (b) is correct.

Step-by-step explanation:

The real wages refers to the wages that are adjusted for the inflation in an economy. If there is an increase in the wage level of the workers then as a result there is an increase in the nominal wages but this will not necessarily increase the real wages. If the rate of change in the wages of the workers is same as the rate of change in the inflation in an economy then there will be no change in the real wages.