If the CPI increases (an increase in the price level) and nominal wages are sticky in the short run (i.e. don't immediately adjust to changing economic conditions), the real wage will decrease. A worker's take home pay will have less purchasing power.
Great stuff! Thank you so much.
Wat is the real action ship between the real wage nd the cpi?
Thanks you… what is the relationship between the real wage nd the cpi?
If the CPI increases (an increase in the price level) and nominal wages are sticky in the short run (i.e. don't immediately adjust to changing economic conditions), the real wage will decrease. A worker's take home pay will have less purchasing power.
@@EconomicsinManyLessons can you tell me the difference between the real nd nominal gdp… nd which one takes inflation into account
Thanks!
You're very welcome!