Suppose you earned $50,000 last year, and inflation is at 5%. You receive a salary increase of $2,000. Explain your increase salary in nominal and real terms. Did you receive an increase?

Question

Suppose you earned $50,000 last year, and inflation is at 5%.  You receive a salary increase of $2,000.  Explain your increase salary in nominal and real terms.  Did you receive an increase?

kan · Answer

NO 50000x5% =2500 50000-2500=47500