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kondaur [170]
2 years ago
11

Ginny currently earns a (real or nominal) wage of $12.00 per hour; in other words, the amount of her paycheck each week is $12.0

0 per hour times the number of hours she works. Suppose the price of sparkling water is $2.50 per gallon; in this case, Ginny (real or nominal) wage, in terms of the amount of sparkling water she can buy with her paycheck, is gallons of sparkling water per hour. When workers and firms negotiate compensation packages, they have expectations about the price level (and changes in the price level) and agree on a (real or nominal) wage with those expectations in mind. If the price level turns out to be higher than expected, a worker's (real or nominal) wage is than both the worker and employer expected when they agreed to the wage. Ginny and her employer both expected inflation to be 4% between 2012 and 2013, so they agreed, in a two-year contract, that she would earn $12.00 per hour in 2012 and $12.48 per hour in 2013. However, suppose inflation between 2012 and 2013 actually turned out to be 7%, not 4%. For example, suppose the price of sparkling water rose from $2.50 per gallon to $2.68 per gallon. This means that between 2012 and 2013, Ginny's nominal wage (increased or decreased) by _______ % , and her real wage (increased or decreased) by approximately _____%.
Business
1 answer:
rewona [7]2 years ago
5 0

Answer:

Her nominal wage increase by: (12.48/12)-1= 0.04= 4%

Her real wage decreased by: 4% - 7$= -3%

Explanation:

Giving the following information:

Ginny currently earns a (real or nominal) wage of $12.00 per hour. Ginny and her employer both expected inflation to be 4% between 2012 and 2013, so they agreed, in a two-year contract, that she would earn $12.00 per hour in 2012 and $12.48 per hour in 2013. However, suppose inflation between 2012 and 2013 turned out to be 7%, not 4%.

Her nominal wage increase by: (12.48/12)-1= 0.04= 4%

Her real wage decreased by: 4% - 7$= -3%

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12%

Explanation:

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You found your dream vacation cottage in the mountains and your offer of $78,000 was accepted. You plan to put 20% down and will
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Answer:

financing 62,400 dollars

Monthly Payment   $ 465.48

Total Interest  21,386.4  

Rounding to nearest $ 100

Additional $$  34.52

We save up to 16 payments and $2,136.4 in interest.

By-weekly payment  $232.60

Total Interest saved $ 194.4

Explanation:

78,000 less 20% down-payment: 62,400

Monthly  Payment

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV  $62,400.00

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rate 0.0034375

62400 \div \frac{1-(1+0.0034375)^{-180} }{0.0034375} = C\\

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Total Interest

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C \times \frac{1-(1+r)^{-time} }{rate} = PV\\

C  $500.00

time n

rate 0.0034375

PV $62,400.0000

500 \times \frac{1-(1+0.0034375)^{-n} }{0.0034375} = 62400\\

(1+0.0034375)^{-n}= 1-\frac{62400\times0.0034375}{500}

(1+0.0034375)^{-n}= 0.571

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-n= \frac{log0.571}{log(1+0.0034375)

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180 - 164 = 16 payments

Total Interst 500 x 163.30 - 62,400 = 19,250

Interest savings 21,386.4 - 19,250 = 2,136.4

If payment are bi-weekly:

then payments will be:

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV  $62,400.00

time 360

rate 0.00171875

62400 \div \frac{1-(1+0.00171875)^{-360} }{0.00171875} = C\\

C  $ 232.598

And total Interest:

232.2 x 360 - 62,400 = 21,192

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